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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Reporting on other assignments

Kestrel & Co, a firm of accountants, is engaged to review the annual financial statements of Lumen Ltd, a private company that is not required to have an audit. The engagement will follow ISRE 2400 (Revised). What level of assurance does the practitioner's review conclusion provide?

A review under ISRE 2400 (Revised) gives limited assurance. The practitioner expresses a negative form of conclusion, saying nothing has come to attention that the financial statements are not prepared in accordance with the framework. A positive opinion is given only in an audit with reasonable assurance.

  1. AReasonable assurance, expressed positively as an opinion that the statements give a true and fair view
  2. BLimited assurance, expressed in the form of a negative conclusionCorrect
  3. CNo assurance, because the work consists only of compilation
  4. DAbsolute assurance, because the practitioner is independent of management

Explanation

ISRE 2400 (Revised) engagements provide limited assurance, which is lower than reasonable assurance. The conclusion is expressed negatively, stating that nothing has come to the practitioner's attention indicating the statements are not prepared in accordance with the framework. Reasonable assurance and positive opinions belong to audits.

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