importantand limitations of assurance engagement Related: International Auditing and Assurance Standards - Auditing Concepts, Auditing and Secretarial Practice?

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important& limitations of assurance engagement Related: International...

Merits are:

- primarily it increases user’s confidence over financial statements especially if independent person has audited them and expressed his opinion

- the procedures applied during the engagement help discover such issues that management might not aware of before

auditor when working in conjunction with management may improve different aspects of operations

- it helps those charged with governance carrying out their duties

Demerits of audit engagement as mentioned earlier are mostly connected with the limitations of audit engagement which are:

- it cannot provide absolute assurance whether subject matter is absolutely accurate

- it does not help in determining the effectiveness of the management

- most of the time it helps in discovering the discrepancies in the system that has resulted in the misstatement and the ones with no connected misstatement go unnoticed

- even if auditor conduct the engagement with reasonable care, some misstatements may go undetected

- use of judgment and existence of persuasive evidence also limits the accuracy of engagement and conclusions reached by the auditor

- audit is usually conducted on the basis of general purpose framework that might not be helpful in specific situations and might not provide assurance of specific nature

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