Accounting Multiple Choice Question – 16 August 2025

The following is an extract from an independent accountant’s unmodified report on a profit forecast:

‘Based on our examination of the evidence supporting the assumptions, nothing has come to our attention which causes us to believe that these assumptions do not provide a reasonable basis for the forecast.’

Which one of the following best describes the type of assurance provided by this statement?

Select ONE answer:

1. Positive assurance expressed negatively
2. Negative assurance expressed positively
3. High level of assurance expressed negatively
4. Limited level of assurance expressed negatively

Show your workings to arrive at your answer, and explain and justify your reasons:

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This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct == > There are two types of conclusions which can be given: a conclusion expressed in positive terms and a conclusion expressed in negative terms. A conclusion expressed in negative terms is indicated by the phrase ‘nothing has come to our attention’, which indicates the restricted work carried out and hence the fact that the assurance is limited, as opposed to reasonable. Hence, this type of assurance is a limited level of assurance expressed negatively.

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