The degree of assurance that can be provided about the reliability of the financial statements of a company will depend on:
- The amount of work performed in carrying out the assurance process, and
- The results of that work.
The resulting assurance falls into one of two categories:
Reasonable Assurance
A high (but not absolute) level of assurance provided by the practitioner’s conclusion expressed in a positive form. E.g. “In our opinion the accounts are true and fair”. The objective of a statutory audit is to provide reasonable assurance.
Limited Assurance
A moderate level of assurance provided by the practitioner’s conclusion expressed in a negative form. E.g. “Based on our review, nothing has come to our attention that causes us to believe that the accompanying financial statements do not give a true and fair view”. The objective of a review engagement is often to provide limited assurance.
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