## Types of Assurance Engagements

An assurance engagement is one where a practitioner expresses a conclusion designed to enhance the degree of confidence of intended users (other than the responsible party) about the evaluation/measurement of a subject matter against criteria.

### Two Main Types

Feature	Reasonable Assurance	Limited Assurance
Level of assurance	Higher	Lower
Procedures performed	More extensive	Fewer
Conclusion form	Positive: "In our opinion…"	Negative: "Nothing came to our attention…"
Example	Statutory audit of financial statements	Review of financial statements

### Three Examples of Assurance Engagements

1. Audit of financial statements — Reasonable assurance; positive opinion

2. Review of financial statements — Limited assurance; negative conclusion

3. Other assurance engagements — e.g., reporting on internal controls, compliance, sustainability reports

> No assurance engagement — reasonable or limited — provides absolute assurance.

Worked example

### Example 1

KST Limited — Identifying the Engagement Type

KST Ltd. appoints CA T to provide an assurance report on financial statements. The engagement gathers sufficient appropriate evidence on the basis of which limited conclusions can be drawn.

Identification: This is a Limited Assurance Engagement (similar to a review engagement).

Two other features of limited assurance engagements:

1. Provides a lower level of assurance than a reasonable assurance engagement.

2. Performs fewer procedures than a reasonable assurance engagement.

⚠️ Common exam mistakes

Confusing limited assurance (negative conclusion, fewer procedures) with reasonable assurance (positive opinion, extensive procedures)
Thinking any assurance engagement provides absolute assurance — no engagement provides absolute assurance
Mixing up conclusion language: reasonable assurance uses positive form ('In our opinion…'), limited uses negative form ('Nothing came to our attention that causes us to believe…')

Reference:

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Types of Assurance Engagements – Reasonable vs Limited Assurance

Worked example

⚠️ Common exam mistakes