Week 1 - Levels of Assurance Flashcards
What are the three levels of assurance in order?
Limited -> Reasonable -> Absolute
How is limited assurance achieved?
Achieved by ‘other’ assurance engagements
How is limited assurance expressed?
Expressed by negative conclusion
How is reasonable assurance achieved?
Achieved by statutory audit
How is reasonable assurance expressed?
Expressed by positive conclusion
e.g stated it is true and fair and follows IFRS guidlines
How is absolute assurance achieved?
May not even be possible
How is absolute assurance expressed?
Uneconomic
Define reasonable assurance
A high level of assurance, that is less than absolute assurance, where the engagement risk has been reduced to an acceptably low level, which then allows a conclusion to be expressed positively
Define limited assurance
A meaningful level of assurance, that is more than inconsequential but is less than reasonable assurance, that engagement risk has been reduced to an acceptable level, which then allows a conclusion to be expressed negatively
