CHAPTER - I -

What is Assurance?
Reasonable assurance contains statutory audits it is Iree Irom material misstatements and true and
fair.
Limited assurance contains review engagements

Why we need assurance?
Assurance reduces the risk and increase the conIidence Ior the client.
How assurance work?
Takes opinion or makes research
The elements in Assurance are;
1. &ser
2. Subject matter
3. Practitioner
. Responsible party
5. Criteria
6. Subject matter inIormation (Some times)
Note: There three parties involved in Tripartite engagement:
1. The user
2. Responsible party
3. The practitioner
Assurance engagements?
!ractitioner examines the subject matter or subject inIormation and reports to intended users.
Types of assurance engagements?
Reasonable assurance is high level positive report.
In reasonable assurance engagement, the practitioner gathers suIIicient appropriate evidence, concludes
that the subject matter conIorms in all material respects with identiIied suitable criteria, gives his report in
the Iorm oI !ositive assurance.
Limited assurance is moderate level negative report
In limited assurance practitioner gathers suIIicient appropriate evidence to be satisIied that the subject
matter is plausible in the circumstances, gives his report in the Iorm oI negative assurance.
Who are stakeholders of a company?
The stake holders oI a company are all those who are inIluenced by, or can inIluence, the company`s
decisions and actions. Examples oI stake holder groups are;
O Shareholders
O anagement, i.e. the directors or toerh senior oIIicials with an executive role
O ther employees
O Those charged with governance, i.e. those whose role is to supervise management to ensure that
they operate the business in the interests oI the shareholders and other stakeholders and not,
purely in their own, personal interests.
O Customers
O Suppliers
O The government
O Lenders oI Iunds
O community organizations, especially in the local neighborhood.