The Role of an Assurance Engagement

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Recommended: The importance of independence for auditors

An effective relationship businesses and stakeholders is driven by the confidence of each other. Using assurance providers service will, if reasonable, strength this relationship. However, their role is sometimes not clear for the stakeholders. The term assurance, its benefits to businesses, how independence is maintain and the effect of the ISA 700 revision on the expectation gap will be the four focus points of this report
In an assurance engagement, the practitioner expresses a conclusion designed to enhance the intended users’ degree of confidence about the outcome of an evaluation of measurement of a subject matter against specified criteria (ICAEW, 2013). In addition, the key elements of an assurance engagement are: a three party relationship (the practitioner, the intended users, the responsible party), a subject matter (data, systems or processes, behaviour), suitable criteria, sufficient appropriate evidence to support the assurance opinion and an assurance report (ICAEW, 2013).
Moreover, the definition given above is issued by the IFAC whose objective is to protect the public interest; therefore, to incite higher quality it has introduced two types of assurance engagement (ICAEW, 2013):
- Reasonable assurance: A high level of assurance, in which the auditor will express a conclusion designed to enhance the degree of confidence of the intended users of the financial statements, that engagement risk has been reduced to an acceptably low level, as the basis for a conclusion to be expressed positively.
- Limited assurance: the objective of a limited assurance engagement is a reduction in assurance engagement risk to a level that is acceptable in the circumstances of the engagement, which then allows a negative form of expres...

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...rinciples-based meanwhile avoiding possible threats but all theses factors at the end are affecting the final judgment. In my opinion, reworking on the ideology of independence could be a solution, which would narrow the expectation gap, and improve the auditing profession.

Bibliography
A. Gold, U. Gronewold, C. Pott. "http://www.ifac.org/sites/default/files/downloads/Study_4_ASB_ResearchReport.pdf." 2009.
Cotterill, Joseph. Groupon in accounting mess shocker. 30 March 2012. 17 November 2013 .
Financial Reporting Council. International Standard on Auditing (UK and Ireland) 700. 01 June 2013. 17 November 2013 .
ICAEW. ASSURANCE (STUDY MANUAL). 2014.

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