Day: August 18, 2025

The level of assurance provided by an assurance engagement will depend on the type of engagement.

For each of the following examples, select the level of assurance which would be given – Statutory audit?

Select ONE answer:

1. Absolute
2. Reasonable
3. Limited
4. Unlimited

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

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

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

The answer is 2

1. Not correct
2. Correct == > A statutory audit provides reasonable assurance, which reflects the comprehensiveness of the audit procedures carried out. No assurance engagement, not even a statutory audit, can give absolute assurance. A review of financial information gives limited assurance, which is a lower level of assurance than a statutory audit, and thus, its conclusion would be worded negatively. A report on profit and cash flow forecasts gives limited assurance because forecasts are, by nature, about uncertain future events, and so cannot be made with enough certainty to give a ‘reasonable’ level of assurance.
3. Not correct
4. Not correct

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