One may envision a continuum of assurance ranging from absolute assurance to no assurance. In between may be reasonable assurance, limited assurance, and a summary of findings with no other assurance.a. What level of assurance is provided in the CPA's report by each of the following types of engagements?Examinations
Audits
Review
Agreed-upon procedures
Compilations and financial statement preparation
b. What type of assurance is provided on financial statements prepared following a special purpose basis of accounting other than generally accepted accounting principles?
What will be an ideal response?
a. Assurance provided:
Examinations-reasonable assurance
Audits-reasonable assurance
Review-limited assurance
Agreed-upon procedures-summary of findings
Compilations and financial statement preparation-no assurance
b. The assurance provided is dependent upon the nature of the service provided. With financial statements, the options (and assurance) possible are audit (reasonable assurance), review (limited assurance), and financial statement preparation and compilations (no assurance). Additionally, agreed-upon procedures could be applied to various elements, accounts, or items of the financial statements (a summary of findings would be provided).
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