Reasonable Assurance Concept

Reasonable Assurance Concept

Reasonable assurance means that a high degree of assurance, but not absolute assurance, because due to inherent limitation of audit absolute assurance is not possible.

 Absolute Assurance is not possible

Absolute assurance is not possible due to inherent limitation of audit. Audit is based on the sampling and not hundred population and most of the audit evidences are persuasive and not conclusive in nature.

Obtaining Reasonable Assurance

Reasonable assurance is obtained by obtaining sufficient appropriate evidence. Audit risk of misstatement is reduced by sufficient audit evidence.

Auditor Responsibility for Reasonable Assurance

Auditor shall obtain reasonable assurance that financial statement is free from material misstatement as whole. In circumstances where reasonable assurance is not possible auditor will adopt following course of actions

1.    Express the Qualified opinion ( where qualified opinion is sufficient)

2.    Disclaim or Resign from the assignment ,if resign is possible under circumstances (where qualified opinion is not sufficient)