Write short notes on Limited Assurance Engagement

Auditing and Assurance Revision Questions and Answers

Answer
A limited assurance engagement is an assurance engagement in which the practitioner reduces engagement risk to a level that is acceptable in the circumstances of the engagement but in which the risk is greater than for a reasonable assurance engagement. For a limited assurance engagement, the team must understand the subject matter sufficiently to identify areas where a significant deviation is most likely to arise. Further, obtaining an understanding of internal control relevant to the engagement is usually not required. The evidence needed in a limited assurance engagement would normally be limited to that obtained inquiry, analytical procedures, and discussion, to enable the practitioner to conclude that the subject matter is plausible in the circumstances. In contrast to reasonable assurance engagements, the practitioner in a limited assurance engagement would not normally seek to corroborate evidence obtained as long as the information obtained from carrying out the audit procedures appears plausible in the circumstances to the practitioner. The conclusion for a limited assurance engagement is in the negative form, i.e. “based on the procedures performed and evidence obtained, nothing has come to our attention (…).”



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