Assurance And Audit
Assurance and audit are related concepts, but they have some key differences:
Scope:
Assurance is a broader term that encompasses various activities aimed at providing confidence to stakeholders about the reliability, accuracy, and compliance of information. It can include financial information as well as non-financial information such as internal controls, risk management, sustainability reporting, and more. On the other hand, an audit is a specific type of assurance engagement that focuses on examining and evaluating an organization’s financial statements and related disclosures.
Nature of Opinion:
In an assurance engagement, the practitioner provides an opinion or conclusion on the subject matter based on their assessment of the evidence. This opinion can range from reasonable assurance, where the practitioner provides a high level of confidence, to limited assurance, where the practitioner provides a moderate level of confidence. In an audit, the objective is to express an opinion on whether the financial statements are presented fairly in all material respects and in accordance with the applicable financial reporting framework.
Independence and Standards:
Both assurance and audit engagements require the practitioner to be independent and adhere to professional standards. However, the specific standards and guidelines may differ depending on the type of engagement and the jurisdiction.
Subject Matter:
Assurance engagements can cover a wide range of subject matters, including financial statements, internal controls, compliance with laws and regulations, sustainability reporting, and more. Audits specifically focus on the examination of financial statements and related disclosures.
In summary,Assurance vs Audit: while audit is a specific type of assurance engagement that focuses on financial statements, assurance is a broader term that encompasses various activities providing confidence in different subject matters beyond financial reporting.
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