what is the level of assurance for audit, review, and compilation ?
Homework Answers
Answer:
A. Level of Assurance expected from an Audit:
The audit is the most thorough assurance service requiring considerably more effort on the auditor's part. The auditor is required to Obtain evidence through performing various audit procedures (Compliance and Substantive Procedures etc..).
Level of assurance : Reasonable Assurance (Reasonable assurance' is the level of confidence that an auditor, exercising professional skill and care, is expected to attain from an audit that the financial statements are not materially misstated.
B. Level of Assurance expected from a Review :
A review engagement is conducted to provide limited assurance that there are no material modifications that should be made to the financial statements for them to be in conformity with the financial reporting framework.
Level of assurance : Less assurance to the reader of the financial statements because the Auditor does not perform many audit procedures.
C. Level of Assurance expected from Compilation :
Type of engagement that assist management in presenting financial information in the form of financial statements without undertaking to provide any assurance that there are no material modifications that should be made to the financial statements so they will conform to the acceptable financial reporting framework.
Level of assurance : Lowest Level (Because of the even more limited scope of compilation procedures, the Auditor's report will not express an opinion or provide any assurance regarding the financial statements.
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A compilation engagement is an audit of the system of internal control, whereby an auditor expresses...
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