What are the basic elements of an assurance engagement?

Auditing and Assurance Revision Questions and Answers

Answer

i) Three party relationship: Assurance engagements involve three separate parties: a practitioner, a responsible party and intended users.

ii) An appropriate subject matter: Subject matter information may be the reorganization, measurement, presentation and disclosers represented in financial statements, key indicators, special documents, assertion about effectiveness or statement of compliance depending on the nature of assurance engagements.

iii) Suitable criteria: Criteria can be formal or informal depending up on the nature of assurance engagement. It may be Nepal Standards on Auditing or an established internal control framework or individual control objectives specifically designed for the engagement or applicable law, regulation or contract.

iv) Sufficient appropriate evidence: The practitioner plans and performs an assurance engagement with an attitude of professional skepticism to obtain sufficient appropriate evidence about whether the subject matter information is free of material misstatement. The practitioner considers materiality, assurance engagement risk, and the quantity and quality of available evidence when planning and performing the engagement.

v) Assurance report: The practitioner provides a written report containing a conclusion that conveys the assurance obtained about the subject matter information.



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