Which statement correctly compares reasonable and limited assurance?
Answer and explanation
Correct answer: D. Reasonable assurance needs more extensive evidence than limited assurance and gives more comfort
- Step 1: Both are levels of assurance below absolute.
- Step 2: Reasonable assurance is high but not absolute, so more procedures are needed to reduce risk to a low level.
- Step 3: Limited assurance relies mainly on enquiry and analytical procedures, so comfort is lower.
Answer
Reasonable assurance needs more extensive evidence than limited assurance and gives more comfort.
Why not the others: No engagement provides absolute certainty, including reasonable assurance. Limited assurance requires fewer procedures, not more. The two levels differ in the evidence gathered and in the comfort given.
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