Your colleague asked you to explain to him what a reasonable assurance engagement is. Which option below
Question:
Your colleague asked you to explain to him what a reasonable assurance engagement is. Which option below represents the correct explanation of a reasonable assurance engagement?
1 A reduction in assurance engagement risk to a level that is acceptable in the circumstances of the engagement, but where that risk is greater than for a reasonable assurance engagement; a positive form of expression of the practitioner’s conclusion.
2 A reduction in assurance engagement risk to an acceptably low level; a positive form of expression of the practitioner’s conclusion; sufficient appropriate evidence is gathered as part of a systematic engagement process; the auditor gives reasonable assurance regarding the fair presentation of the financial statements.
3 A reduction in assurance engagement risk to an acceptably low level; a positive form of expression of the practitioner’s conclusion; procedures for gathering sufficient appropriate evidence are deliberately limited.
4 A reduction in assurance engagement risk to an acceptably low level; a positive form of expression of the practitioner’s conclusion; sufficient appropriate evidence is gathered as part of a systematic engagement process; a moderate level of assurance is given.
Auditing and Assurance Services
ISBN: 978-0077862343
6th edition
Authors: Timothy Louwers, Robert Ramsay, David Sinason, Jerry Straws