1.2 - Levels of Assurance

Question 1

What is the ICAEW a member of?

Answer 1

IFAC - International Federation of Accountants

Question 2

What are the two types of assurance engagement?

Answer 2

• reasonable assurance engagement
• limited assurance engagement

Question 3

Reasonable assurance

Answer 3

A high level of assurance, that is less than absolute assurance, that engagement risk has been reduced to an acceptably low level, which then allows a conclusion to be expressed positively

Question 4

Limited assurance

Answer 4

A meaningful level of assurance, that is more than inconsequential but it less than reasonable assurance, that engagement risk has been reduced to an acceptable level, which then allows a conclusion to be expressed negatively

Question 5

Why are there two types of assurance engagement?

Answer 5

The level of assurance that can be given depends on the evidence that can be obtained by the practitioner

Question 6

What are the two key differences between the two types of assurance engagement?

Answer 6

• the evidence obtained
• the type of opinion given

Question 7

What kind of conclusion is given for each level of assurance?

Answer 7

Positive wording for reasonable
Negative wording for limited