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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Specific assignments

Kestrel Foods asks its auditor to perform a review of its interim financial statements and to state whether anything has come to the auditor's attention indicating that they are not prepared in accordance with the applicable framework. Which level of assurance and form of conclusion is this?

A review of this kind gives limited assurance with a negative form of conclusion. The practitioner mainly uses enquiry and analytical procedures, which gather less evidence than an audit, so can only state that nothing has come to attention suggesting the statements are misstated.

  1. AReasonable assurance, expressed as a positive opinion that the statements give a true and fair view
  2. BLimited assurance, expressed in a negative form of conclusionCorrect
  3. CNo assurance, expressed as a report of factual findings only
  4. DLimited assurance, expressed as a positive opinion supported by sufficient evidence

Explanation

A review engagement provides limited assurance. The procedures, mainly enquiry and analytical procedures, are less extensive than an audit, so the conclusion is negative in form: nothing has come to attention. A positive opinion needs the more extensive evidence of an audit.

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