Limited Assurance Engagement

GinnyBee

I'm just reading throught the MIP guidance and was just wondering if many people were licenced in Limited Assurance Engagement and what it actually means you do in practice for your clients. I'm not completely clear from the details given, insight sought please!

Thank you!

This is what the guide says (cut and paste job, can't quote):

"Limited Assurance Engagement (LAE)

In a Limited Assurance Engagement the accountant expresses an opinion regarding the organisation’s financial accounts which is intended to be relied upon by third parties (therebycreating a duty of care between the accountant and the third party).

It is a mandatory requirement that licensed members in practice undertaking a Limited AssuranceEngagement use the following wording in the accountant’s report “... nothing has come to our attention to refute the principals’ confirmation that the financial statements give a true and fair view…”. The member is allowed to add additional caveats as they deem necessary to further reduce the level of risk, for example by specifying which third parties can rely on the financial statements.

For the purposes of the AAT’s Guidelines and Regulations, the licensed area of Limited Assurance Engagement specifically excludes Independent Examinations, as they are a separate licence area (even though an Independent Examination may be perceived to be a form of assurance
engagement)."

Monsoon

Its like Audit. I don't know, because I'm not qualified to do it. I believe it's where you add more weight to the accounts produced so a 3rd party can rely on them more (as opposed to average accounts where you state its from their records and explanations and you offer no opinion).

From the guidelines:

The broad criteria you will need to satisfy in order to be granted a licence in Limited Assurance
Engagements is as follows:
• You are an AAT full member with a minimum of two years full time or equivalent part time
internal or external audit experience.
• You are an AAT full member and have successfully completed the audit and assurance paper of
the ICAEW, ICAS or ACCA qualification and have practical audit experience.
• You hold full membership with either ICAEW, ICAS or ACCA and have practical audit
experience.

stefanboro

Ah, my upcoming exam in audit and assurance is going to be of some use!

An external statutory audit is a form of a reasonable assurance engagement. By providing reasonable assurance the practitioner is able to positively verfiy that the subject matter at hand (financial statements) do present a true and fair view blah blah blah.

On the other hand a limited assurance engagement is simply a form of audit which entails fewer work then a reasonable assurance engagement and tends to focus on one particular subject matter instead of the financial statements as a whole, although it can focus on the financial statements and when it does it tends to be called a review engagement.

Essentially, a limited assurance service is not statutory and therefore is not as stringent in its requirements as a reasonable assurance service, although there are auditing standards that govern limited assurance.

I hope that helps although it was a quite long winded answer.