Types of Assurance Engagement
What is assurance & Types of Assurance Engagement
What is Assurance Engagement:
Assurance Engagement Definition: Any assignment/engagement which has five elements(Below) becomes an assurance engagement
Five Elements of an Assurance Engagement
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- An assurance engagement will require a three-party relationship comprising:
- a) The intended user who is the person who requires the assurance report (Share Holders, Lenders, etc, etc)
- b) The responsible party, which is the organization responsible for preparing the subject matter to be reviewed (Board of Directors)
- c) The practitioner who is the professional who will review the subject matter and provide assurance. (i.e. an accountant)
- The second element is required for an assurance engagement is a suitable subject matter. The subject matter is the data that the responsible party has prepared and which requires verification (e.g Financial statements)
- The subject matter is then evaluated or assessed against suitable criteria in order for it to be assessed and an opinion provided (e.g IAS & IFRS)
- The practitioner must ensure that they have gathered sufficient appropriate audit evidence in order to give the required level of assurance engagement.
- In the last one, an assurance report provides the opinion which is given by the practitioner to the intended user(ShareHolders)
Types of assurance Engagement
Difference between audit and assurance OR Assurance meaning in accounting OR Types of assurance services
Types of Assurance assignments
Reasonable Assurance
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Limited Assurance
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Assignments were no Assurance is given
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See also: Ratio Analysis
