An assurance engagements one which a practitioner expresses a conclusion designed to enhance a degree of confidence among the intended users other than the responsible parties (management) about the outcome of an evaluation or measurement of the subject matter. An assurance is an opinion expressed by an assurance provider on a subject matter.
Elements of an assurance engagement
1. Parties’ relationship involving a practitioner, a responsible party and responsible users.
2. An appropriate subject matter.
3. Suitable criteria – A benchmark used to measure subject matter.
4. Sufficient appropriate evidence.
5. A written assurance report in the form appropriate to a reasonable assurance engagement or a limited assurance engagement.
Characteristics of suitable criteria
1. Must be relevant i.e. contributes to conclusions that assist in decision making by intended use.
2. Completeness i.e. contains all relevant factors that could affect conclusion in the
context of engagement circumstance.
3. Reliability allowing for consistent evaluation of the subject matter including
presentation and disclosure.
4. Neutrality contributing to bias free conclusions.
5. Understanding – Contributes to conclusions that are clear, comprehensive and not subject to different interpretation.