Other Assignments and Reporting
What you must understand
Beyond the statutory audit, AAA examines review engagements (limited assurance), agreed-upon procedures (factual findings, no assurance), compilation engagements, due diligence, forensic assignments, and reporting on other matters such as profit forecasts, internal controls, and grant or regulatory returns. Know the assurance continuum: audit (reasonable assurance) → review (limited assurance) → agreed-upon procedures (no assurance) → compilation (no assurance). Understand report structure: opinion, basis for opinion, key audit matters (where required), going concern, other information, and responsibilities sections.
Traps in questions
- Using audit language ("true and fair", "reasonable assurance") in a review or AUP report.
- Forgetting that AUP reports state factual findings and expressly disclaim assurance.
- Omitting the basis for opinion or misplacing responsibilities between management and auditor.
- Confusing modified opinion types: qualified, adverse, disclaimer - and when each is appropriate.
- Ignoring other information (e.g. the strategic report) in the auditor's report.
Rule of thumb
Match the level of assurance to the engagement type before drafting anything. The wording of the conclusion follows from the assurance level, not the other way round.
Worked example
A client asks you to review a cash flow forecast for a lender. This is a review of prospective financial information: limited assurance, negative-form conclusion, and a clear statement of the assumptions' reasonableness. If instead the lender only wants the auditor to check arithmetic and agree inputs to source documents, that is an AUP engagement - factual findings, no assurance, and use restricted to the named parties.