3.1 - Limitations of Assurance

Question 1

What is the first limitation of assurance?

Answer 1

The fact that testing is used - auditors do not oversee the process of building the financial statements from start to finish

Question 2

What is the second limitation of assurance?

Answer 2

The fact that the accounting systems on which assurance providers may place a degree of reliance also have inherent limitations

Question 3

What is the third limitation of assurance?

Answer 3

The fact that most audit evidence is persuasive rather than conclusive

Question 4

What is the fourth limitation of assurance?

Answer 4

The fact that assurance providers would not test every item in the subject matter

Question 5

What is the fifth limitation of assurance?

Answer 5

The fact that the client’s staff may collude in fraud that can then be deliberately hidden from the auditor or misrepresent matters to them for the same purpose

Question 6

What is the sixth limitation of assurance?

Answer 6

The fact that assurance provision can be subjective and professional judgements have to be made

Question 7

What is the seventh limitation of assurance?

Answer 7

The fact that assurance providers rely on the responsible party and its staff to provide correct information, which in some cases is impossible to verify by other means

Question 8

What is the eighth limitation of assurance?

Answer 8

The fact that some items in the subject matter may be estimates and are therefore uncertain. It is impossible to conclude absolutely that judgemental estimates are correct

Question 9

What is the ninth limitation of assurance?

Answer 9

The fact that the nature of the assurance report might itself be limiting, as every judgement and conclusion the assurance provider has drawn cannot be included in it