Benefits & limitations of assurance

Benefits of assurance

• Key benefit – independent professional verification
• Increase the confidence and reliability of other users
• Help to prevent error and frauds
• Help to making investment decision

“Assurance can never be absolute”

Limitations of assurance:

• The fact that testing is used
• Inherent limitations of accounting and internal control system
• The most of the audit evidence is persuasive rather than conclusive
• The fact that assurance provider should not every item in the subject matter
• The fact that client’s staff member may collude in fraud that can be deliberately hidden from the auditor or misrepresent matters to them for same purpose
• The fact that professional judgments have to be made
• Use of estimates

The expectation gap – meaning that there is a gap between what the assurance provider understands he is doing and what the user of the information believe he is doing.