Best answer: What is the basic objective of an assurance engagement?

The objective of an assurance engagement is to obtain sufficient appropriate evidence to express a conclusion, providing reasonable or limited assurance, as to whether the audited body has complied with the specified requirements of the appropriate legislation (the ‘criteria’) in all material respects.

What is the objective of assurance services?

Assurance services are aimed at improving the quality of information for the individuals making decisions. Providing independent assurance is a way to bring comfort that the information on which one makes decisions is reliable, and therefore reduces risks, in this case, information risk.

What is an assurance engagement examples?

For example, an audit on financial statements is an example of the reasonable assurance engagement. Auditors will express their opinion based on the result of their examination. … In this case, the entity needs to engage with the qualified auditors to review its financial statements.

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What is assurance engagement in audit?

assurance engagement means an engagement in which an Auditor/ Audit Firmexpresses an opinion about the outcome of the evaluation or measurement of a subject matter against criteria and is aimed to enhance the degree of confidence of the third parties towards such subject matter.

What are the five elements of an assurance engagement?

The five elements of an assurance engagement

  • A three-party relationship, involving: the practitioner, a responsible party and intended users.
  • Appropriate subject matter.
  • Suitable criteria.
  • Sufficient, appropriate evidence to support the conclusion.
  • A conclusion contained within a written report.

Why do we need assurance?

In the public and not-for-profit sectors management may want assurance to maintain the confidence of fund providers and the public as well as for management’s own purposes. In other words, assurance is sought to inform management and other users and enable them to make sound judgements and decisions.

What are the benefits of assurance engagement?

But what are the benefits?

  • A closer look at a business through the eyes of a skilled business professional.
  • Ensures users are more confident that the information presented to them is reliable.
  • Gives more credibility to business reporting processes.
  • Facilitates the running and management of the business.

What are the types of assurance engagement?

Types of assurance engagement

  • External Audits. An Auditor states an opinion as to whether the financial statements Give a true and fair view. …
  • Review engagements. The auditor reviews the financial statements using less evidence than required by an audit.

What are the types of assurance services?

In order of increasing level of rigor, accountants generally offer three types of assurance services: compilations, reviews and audits. What’s appropriate for your company depends on the needs of creditors or investors, as well as the size, complexity and risk level of your organization.

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What is the difference between positive and negative assurance?

Negative assurance is a confirmation from an auditor that certain facts are accurate because there is no evidence to the contrary. When positive assurance (the proof of facts) is not applicable, negative assurance is used. The purpose of negative assurance is to confirm that no fraud or violations have been found.

Why is it important to have audit assurance engagement?

It is of vital importance for auditors to consider the definition of an assurance engagement using non-audit jargon as this will help them to get an understanding on what a layman (the general public who are the majority users of financial statements) perceive the audit task to comprise of and hence obtain an

What is the assurance engagement?

“Assurance engagement” means an engagement 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 outcome of the evaluation or measurement of a subject matter against criteria.

What is subject matter in assurance engagement?

The subject matter of an assurance engagement is to be identifiable, capable of consistent evaluation or measurement against suitable criteria and in a form that can be subjected to procedures for gathering evidence to support that evaluation or measurement.

Which of the following is not one of the five elements of an assurance engagement?

Which of the following is not one of five elements exhibited by all assurance engagements? A multi-party relationship involving a practitioner, a responsible party, those in charge of governance, and the intended users. Evidence.

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What are non-assurance services?

NON-ASSURANCE SERVICES In non-assurance services, CPAs issue reports that do not express an opinion or conclusion on the subject matter (for example, financial statements). … In an agreed-upon procedures engagement, the CPA issues a report, but does not express an opinion or a conclusion on the subject matter.

What do you mean by assurance?

1 : the state of being assured: such as. a : a being certain in the mind the puritan’s assurance of salvation. b : confidence of mind or manner : easy freedom from self-doubt or uncertainty spoke with assurance about his future plans also : excessive self-confidence : brashness, presumption.

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