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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Audit-related and assurance services

Kestrel & Co, a firm of accountants, is engaged by Lumora Ltd to perform an agreed-upon procedures engagement under ISRS 4400 (Revised) on the company's trade receivables. Which statement best describes the conclusion or assurance the practitioner provides in the resulting report?

In an agreed-upon procedures engagement under ISRS 4400 (Revised), the practitioner reports only the factual findings from the procedures performed. No opinion or assurance conclusion is given, because users evaluate the findings and draw their own conclusions.

  1. AA report of factual findings only, with no opinion or conclusion expressing assuranceCorrect
  2. BA limited assurance conclusion in negative form on the receivables balance
  3. CA reasonable assurance opinion on whether receivables are fairly stated
  4. DAn opinion on the effectiveness of the internal controls over receivables

Explanation

Under ISRS 4400 (Revised) the practitioner performs procedures agreed with the engaging party and reports the factual findings. No assurance is expressed, so users draw their own conclusions. Limited or reasonable assurance conclusions belong to review and audit engagements.

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