a. Assurance can be provided by:

i. An audit: this may be external audit, internal audit or a combination of the two; and

ii. A review: this is a „voluntary‟ investigation into or review of an aspect of the financial statements.

b. Differences between a reasonable assurance and a limited assurance

c. An assurance engagement performed by a practitioner will consist of the following five elements:

i. A three-party relationship:

 Practitioner – the individual providing professional services that will review the subject matter and provide the assurance, for example, the audit firm in a statutory audit;

 Responsible party – the person(s) responsible for the subject matter, for example, the directors are responsible for preparing the financial statements to be audited; and

 Intended users – the person(s) or class of persons for whom the practitioner prepares the assurance report, for example, the shareholders in a statutory audit.

ii. Subject matter: This is the data such as the financial statements that have been prepared by the responsible party for the practitioner to evaluate. An example might be a cash flow forecast to be reviewed by the practitioner;

iii. Suitable criteria: This can be referred to as „the rules‟ against which the subject matter is evaluated to reach an opinion. In a statutory audit, this would be the applicable reporting frameworks (for example, IFRS and CAMA);

iv. Evidence: Information used by the practitioner in arriving at the conclusion on which their opinion is based. This must be sufficient (enough) and appropriate (relevant); and

v. Assurance report: The report (normally written) containing the practitioner’s opinion. This is issued to the intended user following the collection of evidence.