Limited assurance audit
Limited assurance audit also known as a review engagement, is a type of assurance engagement where the auditor provides a moderate level of assurance on the financial statements of an entity. It is less extensive than a full audit but provides more assurance than a compilation engagement.
In a process, the auditor performs procedures such as inquiries, analytical procedures, and review of supporting documentation to obtain a reasonable basis for expressing limited assurance. The procedures design to provide a moderate level of assurance that the financial statements are free from material misstatement.
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During the process, the auditor assesses the appropriateness of accounting policies, evaluates the overall presentation of the financial statements, and performs analytical procedures to identify areas of potential misstatement. However, the auditor’s procedures limit in scope compared to a full audit, and the level of assurance provided is lower.
The conclusion in a limited assurance audit is typically stated as “based on our review, nothing has come to our attention that causes us to believe that the financial statements are not compliant, in all significant aspects, with the appropriate financial reporting framework.
It often perform when users of the financial statements require some level of assurance beyond a compilation but do not need the high level of assurance provided by a full audit. It provides a middle ground between the two and can be a cost-effective option for certain entities and stakeholders.
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