ICAB CL Assurance key terms

An engagement in which a practitioner expresses a conclusion designed to enhance the degree of confidence of intended users about the evaluation of a subject matter against criteria.

A high, though not absolute, level of confidence that the subject matter is free from material misstatement, expressed as a positive conclusion and supported by sufficient appropriate evidence.

A lower level of confidence than reasonable assurance, expressed in a negative-form conclusion that nothing has come to attention suggesting the subject matter is materially misstated.

A conclusion stating that, based on procedures performed, nothing has come to the practitioner's attention indicating the subject matter is materially misstated; it is the usual output of limited assurance.

A conclusion stated directly that the subject matter is fairly presented or free from material misstatement, typically arising from an audit performed to obtain reasonable assurance.

The threshold above which omissions or misstatements could reasonably influence the economic decisions of users, judged by size, nature, or the circumstances of the entity.

An amount set below overall materiality to reduce to an appropriately low level the probability that uncorrected and undetected misstatements together exceed materiality.

The risk that the practitioner expresses an inappropriate conclusion when the subject matter is materially misstated; it comprises inherent, control, and detection risk.

The susceptibility of a subject matter or assertion to material misstatement before considering any related internal controls, influenced by complexity, judgement, and estimation uncertainty.

The risk that a material misstatement could occur and not be prevented, or detected and corrected, on a timely basis by the entity's system of internal control.

The risk that procedures performed by the practitioner fail to detect a material misstatement, and which the practitioner manages by designing effective evidence-gathering procedures.

Evidence that is adequate in quantity (sufficient) and relevant and reliable in quality (appropriate) to support the practitioner's conclusion on the subject matter.

All information used by the practitioner to arrive at the conclusions on which the assurance opinion is based, including records underlying the subject matter and corroborating information.

The degree of trust that can be placed in evidence, generally higher when obtained from independent external sources, from original documents, or directly by the practitioner.

Evidence obtained as a direct written response from a third party to the practitioner, in paper or electronic form, about balances, transactions, or other matters.

Tests of detail and substantive analytical procedures designed to detect material misstatements at the assertion level, forming the core evidence base for the opinion.

Procedures performed to evaluate the operating effectiveness of controls in preventing, or detecting and correcting, material misstatements at the assertion level.

Evaluations of financial information by analysing plausible relationships among both financial and non-financial data, used in planning, as substantive tests, and in overall review.

Representations by management, implicit or explicit, about the recognition, measurement, presentation, and disclosure of items in the subject matter that the practitioner tests.

The process designed and effected by those charged with governance and management to provide reasonable assurance about achieving objectives related to operations, reporting, and compliance.

A control that divides incompatible tasks, such as authorising, recording, and custody of assets, among different people to reduce the risk of error or fraud.

Selecting less than 100% of items within a population so that each unit has a chance of selection, allowing the practitioner to draw conclusions about the whole population.

The risk that the practitioner's conclusion based on a sample differs from the conclusion that would be reached if the entire population were tested.

The assumption that an entity will continue in operation for the foreseeable future without intention or necessity to liquidate or cease trading.

Events occurring between the date of the subject matter information and the date of the assurance report that may require adjustment or disclosure.

An opinion that is qualified, adverse, or a disclaimer, issued when the practitioner concludes the subject matter is materially misstated or evidence cannot be obtained.

A conclusion that the subject matter is, in all material respects, prepared in accordance with the applicable criteria, without any qualification or modification.

The formal written output of an assurance engagement containing the conclusion, the criteria used, responsibilities of the parties, and the basis for the conclusion.

A written agreement setting out the agreed terms of the engagement, including scope, responsibilities, basis of fees, and the form of report to be issued.

An engagement providing limited assurance, mainly through inquiry and analytical procedures, resulting in a negative-form conclusion on the subject matter.

The information, condition, or performance that is evaluated against criteria in an assurance engagement, such as financial statements or a sustainability report.

The benchmarks used to evaluate the subject matter; they must be relevant, complete, reliable, neutral, and understandable to intended users.

An attitude of questioning mind, alert to conditions indicating possible misstatement, and a critical assessment of evidence rather than uncritical acceptance.

The application of relevant training, knowledge, and experience in making informed decisions about the courses of action appropriate in the circumstances of the engagement.

Freedom from conditions that could compromise, or appear to compromise, objectivity, comprising independence of mind and independence in appearance.

A state of mind that allows the practitioner to provide services without bias, conflict of interest, or undue influence from others.

The ethical duty to refrain from disclosing information acquired through professional relationships without proper authority, unless there is a legal or professional right or duty to disclose.

The fundamental professional values of integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour that govern practitioner conduct.

Ongoing learning and development that maintains and enhances the knowledge, skills, and judgement needed by a professional accountant throughout a career.

Policies and procedures adopted by a firm to ensure engagements comply with standards and applicable legal requirements and that reports issued are appropriate.

An objective evaluation of the significant judgements and conclusions reached by the engagement team, performed before the report is issued for listed or high-risk engagements.