Reasonable Assurance
Definition
The high but not absolute level of assurance that a statutory auditor seeks to obtain before expressing an opinion. Reasonable assurance acknowledges the inherent limitations of audit procedures and the risk that some material misstatements may not be detected.
- Field
- Statutory auditing
- Level
- High but not absolute
- Acknowledges
- Inherent audit limitations
- Contrasted with
- Forensic audit's fact-finding aim
Common questions
Why doesn't a statutory audit guarantee that no fraud exists in the financial statements?+
Audit procedures rely on sampling, management representations, and inherent limitations such as collusion or sophisticated concealment, so reasonable assurance accepts a residual risk that a material misstatement, including fraud, goes undetected.
How does reasonable assurance in a statutory audit differ from the standard applied in a forensic audit?+
A statutory audit gives an opinion at reasonable assurance across the whole financial statements, while a forensic audit is typically scoped to investigate a specific suspected irregularity in depth, aiming for a more definitive factual finding on that narrow question.
Related terms
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- ISA 240
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- Statutory Audit
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- True and Fair View
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