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

Zephyr Logistics asks its accountant, Mira Patel, to report on whether the company's published sustainability statement complies with the criteria it has itself disclosed. Mira will gather evidence and express a conclusion intended to increase the confidence of the board's external stakeholders. Which of the following is an essential element of an assurance engagement that must be present for this to qualify as an assurance engagement?

Suitable criteria are an essential element of an assurance engagement. The framework requires a three-party relationship, a subject matter, suitable criteria, sufficient appropriate evidence and a written report. Assurance gives reasonable or limited confidence, never a guarantee, and being the statutory auditor or having a fixed fee is not required.

  1. ASuitable criteria against which the underlying subject matter is evaluated or measuredCorrect
  2. BA guarantee from the practitioner that no misstatement exists in the subject matter
  3. CA requirement that the practitioner is also the statutory auditor of the entity
  4. DA fixed-fee arrangement agreed before work starts

Explanation

The IAASB Assurance Framework lists five elements: a three-party relationship, an underlying subject matter, suitable criteria, sufficient appropriate evidence, and a written assurance report. Suitable criteria are therefore essential. Assurance never gives a guarantee, being reasonable or limited only, and neither statutory audit status nor fee basis is an element.

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