Reasonable Assurance – NBC Institute

AA – Nov 2024 – L2 – Q1a – Levels of Assurance

Discusses the differences between reasonable assurance and limited assurance in audit engagements.

Question

According to IAASB Handbook 2023-2024 edition, 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 result of that work. The resulting assurance falls into one of two levels – reasonable assurance and limited assurance.

Required:
In reference to the statement above, discuss the difference between reasonable assurance and limited assurance.

Answer

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Tags: Assurance, Audit, Financial Statements, IAASB, Limited Assurance, Reasonable Assurance, Risk Assessment
Level: Level 2

Topic: Nature and scope of audit and assurance evidence
Series: Nov 2024

AA – May 2024 – L2 – SA – Q6 – Assurance Services

This question focuses on assurance engagements, explaining the differences between reasonable and limited assurance, and details the elements of assurance engagements as performed by a practitioner.

Question

Each assurance engagement is classified on two dimensions: It is either a reasonable assurance engagement or a limited assurance engagement, and either it is an attestation engagement or a direct engagement.

Required:

a. Specify the two channels through which assurance can be provided. (2 Marks)

b. Differentiate reasonable assurance from limited assurance. (3 Marks)

c. Explain the five elements of an assurance engagement performed by a practitioner. (10 Marks)

Answer

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Tags: Assurance engagements, Attestation Engagements, Limited Assurance, Practitioner Responsibilities, Reasonable Assurance
Level: Level 2

Topic: Assurance services
Series: MAY 2024

AA – July 2023 – L2 – Q2c – Audit Failure and Expectation Gap, Regulatory Framework and Audit Responsibilities

Identification of inherent limitations of audit and misconceptions regarding the role of an auditor.

Question

c) Reasonable assurance is the highest level of assurance auditors may provide. However, due to the limitations of auditing, it is impossible to guarantee ‘absolute’ assurance. Some users of financial statements, however, have the misconception that an audit provides absolute assurance and that the audit opinion guarantees that the financial statements are ‘accurate.’ The ‘Expectations Gap’ refers to these and other misunderstandings regarding the work of an auditor.

Required:
i) State FOUR (4) inherent limitations of an audit that makes it impossible to provide ‘absolute’ assurance.

(6 marks)
ii) State THREE (3) misconceptions about the role an auditor plays. (4 marks)

Answer

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Tags: Audit Expectations, Audit Limitations, Misconceptions, Reasonable Assurance
Level: Level 2

Topic: Audit Failure and Expectation Gap, Regulatory Framework and Audit Responsibilities
Series: JULY 2023

AA – May 2018 – L2 – Q1a – Introduction to Audit and Assurance Engagements

Explains the concept of reasonable assurance and its advantages while addressing the role of auditors in assessing the integrity of a finance manager.

Question

The Finance Manager of Nkran Ltd prepared a comprehensive cash flow forecast for the purpose of securing a loan from the bank. This was presented to the bank for evaluation and approval. The bank, after evaluating the cash flow forecast, wrote to Nkran Ltd requesting a reasonable assurance report. The Managing Director of Nkran Ltd, who was impressed with the Finance Manager’s cash flow forecast, is now questioning the integrity of the Finance Manager to the extent of considering dismissing him. The Managing Director decided to consult you, the Auditor, before taking the decision.

i) Write a letter explaining the need for reasonable assurance and its advantages to Nkran Ltd and the elements of an assurance engagement. (8 marks)
ii) Advise the Managing Director on whether his intended decision is well-founded. (2 marks)

Answer

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Tags: Assurance report, Auditor's advice, Bank Loan, Engagement elements, Reasonable Assurance
Level: Level 2

Topic: Introduction to Audit and Assurance Engagements
Series: MAY 2018

AA – Nov 2018 – L2 – Q1a – Introduction to Audit and Assurance Engagements

Explains assurance engagements, differences between reasonable and limited assurance, and elements of assurance engagement.

Question

a) The shareholders of Store and Quary Ltd namely Obodai and Obosie are residing abroad. They appointed directors to see to the day-to-day running of the company. The directors produced the financial statements of the company, which show a true and fair view. Other relevant information regarding directors’ pay and benefits, going concern, and management of risk have been provided by the directors. In order to know the accuracy of the information provided, the shareholders engaged your firm, Standard and Co. Chartered Accountants, to perform an assurance engagement.

Required:
i. Explain an assurance engagement as provided by IAASB. (2 marks)
ii. Explain FOUR (4) elements of an assurance engagement. (4 marks)
iii. Describe the differences between reasonable assurance engagement and limited assurance engagements. (4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Assurance Engagement, Elements of Assurance, IAASB, Limited Assurance, Reasonable Assurance
Level: Level 2

Topic: Introduction to Audit and Assurance Engagements
Series: NOV 2018

AA – Nov 2024 – L2 – Q1a – Levels of Assurance

Discusses the differences between reasonable assurance and limited assurance in audit engagements.

Question

Required:
In reference to the statement above, discuss the difference between reasonable assurance and limited assurance.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Assurance, Audit, Financial Statements, IAASB, Limited Assurance, Reasonable Assurance, Risk Assessment
Level: Level 2

Topic: Nature and scope of audit and assurance evidence
Series: Nov 2024

AA – May 2024 – L2 – SA – Q6 – Assurance Services

This question focuses on assurance engagements, explaining the differences between reasonable and limited assurance, and details the elements of assurance engagements as performed by a practitioner.

Question

Required:

a. Specify the two channels through which assurance can be provided. (2 Marks)

b. Differentiate reasonable assurance from limited assurance. (3 Marks)

c. Explain the five elements of an assurance engagement performed by a practitioner. (10 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Assurance engagements, Attestation Engagements, Limited Assurance, Practitioner Responsibilities, Reasonable Assurance
Level: Level 2

Topic: Assurance services
Series: MAY 2024

AA – July 2023 – L2 – Q2c – Audit Failure and Expectation Gap, Regulatory Framework and Audit Responsibilities

Identification of inherent limitations of audit and misconceptions regarding the role of an auditor.

Question

Required:
i) State FOUR (4) inherent limitations of an audit that makes it impossible to provide ‘absolute’ assurance.

(6 marks)
ii) State THREE (3) misconceptions about the role an auditor plays. (4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Expectations, Audit Limitations, Misconceptions, Reasonable Assurance
Level: Level 2

Topic: Audit Failure and Expectation Gap, Regulatory Framework and Audit Responsibilities
Series: JULY 2023

AA – May 2018 – L2 – Q1a – Introduction to Audit and Assurance Engagements

Explains the concept of reasonable assurance and its advantages while addressing the role of auditors in assessing the integrity of a finance manager.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Assurance report, Auditor's advice, Bank Loan, Engagement elements, Reasonable Assurance
Level: Level 2

Topic: Introduction to Audit and Assurance Engagements
Series: MAY 2018

AA – Nov 2018 – L2 – Q1a – Introduction to Audit and Assurance Engagements

Explains assurance engagements, differences between reasonable and limited assurance, and elements of assurance engagement.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Assurance Engagement, Elements of Assurance, IAASB, Limited Assurance, Reasonable Assurance
Level: Level 2

Topic: Introduction to Audit and Assurance Engagements
Series: NOV 2018

Question Tag: Reasonable Assurance

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AA – Nov 2024 – L2 – Q1a – Levels of Assurance

Discusses the differences between reasonable assurance and limited assurance in audit engagements.

AA – May 2024 – L2 – SA – Q6 – Assurance Services

This question focuses on assurance engagements, explaining the differences between reasonable and limited assurance, and details the elements of assurance engagements as performed by a practitioner.

AA – July 2023 – L2 – Q2c – Audit Failure and Expectation Gap, Regulatory Framework and Audit Responsibilities

Identification of inherent limitations of audit and misconceptions regarding the role of an auditor.

AA – May 2018 – L2 – Q1a – Introduction to Audit and Assurance Engagements

Explains the concept of reasonable assurance and its advantages while addressing the role of auditors in assessing the integrity of a finance manager.

AA – Nov 2018 – L2 – Q1a – Introduction to Audit and Assurance Engagements

Explains assurance engagements, differences between reasonable and limited assurance, and elements of assurance engagement.

AA – Nov 2024 – L2 – Q1a – Levels of Assurance

Discusses the differences between reasonable assurance and limited assurance in audit engagements.

AA – May 2024 – L2 – SA – Q6 – Assurance Services

This question focuses on assurance engagements, explaining the differences between reasonable and limited assurance, and details the elements of assurance engagements as performed by a practitioner.

AA – July 2023 – L2 – Q2c – Audit Failure and Expectation Gap, Regulatory Framework and Audit Responsibilities

Identification of inherent limitations of audit and misconceptions regarding the role of an auditor.

AA – May 2018 – L2 – Q1a – Introduction to Audit and Assurance Engagements

Explains the concept of reasonable assurance and its advantages while addressing the role of auditors in assessing the integrity of a finance manager.

AA – Nov 2018 – L2 – Q1a – Introduction to Audit and Assurance Engagements

Explains assurance engagements, differences between reasonable and limited assurance, and elements of assurance engagement.

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AA – Nov 2024 – L2 – Q1a – Levels of Assurance

Discusses the differences between reasonable assurance and limited assurance in audit engagements.

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AA – May 2024 – L2 – SA – Q6 – Assurance Services

This question focuses on assurance engagements, explaining the differences between reasonable and limited assurance, and details the elements of assurance engagements as performed by a practitioner.

You're reporting an error for "AA – May 2024 – L2 – SA – Q6 – Assurance Services"

AA – July 2023 – L2 – Q2c – Audit Failure and Expectation Gap, Regulatory Framework and Audit Responsibilities

Identification of inherent limitations of audit and misconceptions regarding the role of an auditor.

You're reporting an error for "AA – July 2023 – L2 – Q2c – Audit Failure and Expectation Gap, Regulatory Framework and Audit Responsibilities"

AA – May 2018 – L2 – Q1a – Introduction to Audit and Assurance Engagements

Explains the concept of reasonable assurance and its advantages while addressing the role of auditors in assessing the integrity of a finance manager.

You're reporting an error for "AA – May 2018 – L2 – Q1a – Introduction to Audit and Assurance Engagements"

AA – Nov 2018 – L2 – Q1a – Introduction to Audit and Assurance Engagements

Explains assurance engagements, differences between reasonable and limited assurance, and elements of assurance engagement.

You're reporting an error for "AA – Nov 2018 – L2 – Q1a – Introduction to Audit and Assurance Engagements"

AA – Nov 2024 – L2 – Q1a – Levels of Assurance

Discusses the differences between reasonable assurance and limited assurance in audit engagements.

You're reporting an error for "AA – Nov 2024 – L2 – Q1a – Levels of Assurance"

AA – May 2024 – L2 – SA – Q6 – Assurance Services

This question focuses on assurance engagements, explaining the differences between reasonable and limited assurance, and details the elements of assurance engagements as performed by a practitioner.

You're reporting an error for "AA – May 2024 – L2 – SA – Q6 – Assurance Services"

AA – July 2023 – L2 – Q2c – Audit Failure and Expectation Gap, Regulatory Framework and Audit Responsibilities

Identification of inherent limitations of audit and misconceptions regarding the role of an auditor.

You're reporting an error for "AA – July 2023 – L2 – Q2c – Audit Failure and Expectation Gap, Regulatory Framework and Audit Responsibilities"

AA – May 2018 – L2 – Q1a – Introduction to Audit and Assurance Engagements

Explains the concept of reasonable assurance and its advantages while addressing the role of auditors in assessing the integrity of a finance manager.

You're reporting an error for "AA – May 2018 – L2 – Q1a – Introduction to Audit and Assurance Engagements"

AA – Nov 2018 – L2 – Q1a – Introduction to Audit and Assurance Engagements

Explains assurance engagements, differences between reasonable and limited assurance, and elements of assurance engagement.

You're reporting an error for "AA – Nov 2018 – L2 – Q1a – Introduction to Audit and Assurance Engagements"

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