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- 5 Marks
Question
An assurance engagement is an evaluation or measurement of a subject matter by a professional accountant that is the responsibility of another party, against identified suitable criteria to express a conclusion that provides the intended user with a level of assurance about that subject. Both audit and review work are assurance engagements.
Required:
Describe FIVE differences between an audit and a review engagement.
Answer
| Aspect | Audit | Review |
|---|---|---|
| Scope of Work | Determined by statute (law) | Can be commissioned by anyone |
| Amount of Work | Determined by the auditor as deemed necessary to give positive opinion | Determined by the reviewer as deemed necessary to give negative opinion |
| Type of Assurance | Reasonable assurance | Limited assurance |
| Level of Assurance | High level | Moderate level |
| Type of Opinion | Positive assurance – “The financial statements show a true and fair view” (Opinion) | Negative assurance – “Nothing has come to our attention” (Conclusion) |
- Tags: Assurance engagements, Audit, Review
- Level: Level 2
- Topic: Types of Audit and Assurance Engagements
- Series: NOV 2016
- Uploader: Theophilus