reasonable and limited assurance

1. Yes - audit for reasonable assurance and review for limited assurance 2. Yes 3. Hmmm - they are really 5 terms used in describing levels of assurance rather than 5 levels: The highest level of assurance is "reasonable assurance" - can be provided by nothing less than an audit and is expressed in a "positive" form. Anything less than an audit can give, at best, only limited assurance (because scope/procedures are limited). This is expressed in a "negative" form. PFI is interesting - because actual results are likely to differ, if information is expressed as a range of outcomes, the professional accountant would go NO assurance that actual results will fall within the range. (A Type I report for controls at a service organisation gives NO assurance about the operation of controls.) There is only one example of a moderate level of assurance in IAASB's pronouncements - when reporting on the reasonableness of management's assumptions.

3. but for the sake of AAA (P7) paper, is it important to classify and understand all of these 5 terms ? may i understand reasonable and high level of assurance is like external audit and moderate, limited and negative assurance is for PFI ? 4. in addition, may i know what is the difference between no assurance and negative assurance ? because no assuance is given for forensic accounting but im not sure whether it's considered as negative assurance

3. Yes - I thought that was what I was saying: Audit -> audit procedures -> reasonable assurance - expressed positively Review (say) -> limited procedures -> limited assurance - expressed negatively This is all summarised on page 9 of our notes - together with an explanation of negative. I found some other references to "moderate" level of assurance as the level of assurance associated with a limited assurance engagement. So moderate just means less than reasonable (clearly limited) and will also be expressed negatively. No assurance means its not an assurance engagement - see page 8 for five elements of an assurance engagement if you've forgotten. So preparing tax returns for a client is an engagement - but it's not an assurance engagement - the professional accountant won't express an opinion or conclusion on the tax liability he calculates (!) A forensic assignment to provide a report on the cost of inventory lost in a fire for an insurance claim doesn't have an opinion or conclusion - it reports factual findings. It is up to the recipient to draw their own conclusions.