Question Tag: Elements of Assurance

i. An assurance engagement is one in which a practitioner expresses a conclusion designed to enhance the degree of confidence of the intended users, other than the responsible party, about the subject matter information (i.e., the outcome of the evaluation or measurement of a subject matter against criteria). (2 marks)

ii. An assurance engagement performed by a practitioner consists of the following elements:

• A three-party relationship: the intended user, the responsible party, and the practitioner.
• A subject matter: this is the data to be evaluated that has been prepared by the responsible party.
• Suitable criteria: the subject matter is evaluated or measured against criteria to reach an opinion.
• Evidence: sufficient appropriate evidence needs to be gathered to support the required level of assurance.
• An assurance report: a written report containing the practitioner’s opinion is issued to the intended user. (1 mark each for any four valid points made) (4 marks)

iii.

• Reasonable assurance engagement provides a high, but not absolute, level of assurance. The objective is to reduce engagement risk to an acceptably low level. The conclusion is expressed positively.
• Limited assurance engagement provides a lower level of assurance. The procedures performed are limited compared to reasonable assurance engagements. The conclusion is expressed negatively. (2 marks each) (4 marks)

(Total: 10 marks)