What is the difference between Audit engagement and Assurance engagement?

In few words, all audit engagements are assurance engagements but not all assurance engagements are audit engagements. Audit engagement is one type of assurance engagement that provides reasonable assurance. Assurance engagements can be reasonable assurance engagements, limited assurance engagements or other assurance engagements.

Other assurance engagements are such assurance engagements that are other than audit and review engagements. Assurance related standards setting body IAASB has issued separate standards for each of the three sub classifications assurance engagement. Examples of other assurance engagement includes expressing opinion on prospective financial statements or internal control system of the entity.

Any engagement that fulfills the following criteria is an assurance engagement:

  • Existence of three party relationship
  • Subject matter
  • Criteria
  • Gathering of sufficient appropriate evidence
  • Expression of opinion

However, for an assurance engagement to be an audit engagement one additional requirement is that level of assurance provided by such engagement needs to be of reasonable level.

Another important factor that differentiates audit engagement from other assurance engagements is in audit the expression of opinion is positive as auditor has conducted extensive examination and thus as a result of reasonable assurance obtained his opinion will leave no grey areas. However, in other assurance engagements like in review engagement the expression of opinion is negative as auditor has conducted limited examination.

Other differences includes:

  • Audit engagement is for whole financial statements whereas certain assurance engagements can be for single financial statement out full set or specific element of financial statements or component or activities of the business.
  • The terms of engagement in case of audit are in line with International auditing standards whereas in case of assurance engagement they terms may restrict the practitioner only to specific area.
  • Rights and liabilities of the auditor in audit engagement higher than any other form of assurance engagement.
  • In case of audit engagement the audience includes generally all stakeholders whereas in assurance engagements other than audit audience may be restricted to just one type of stakeholder for example management.
  • The time and resources required for audit engagement are higher than any other form of assurance engagement


  1. Anjalee Fernando Anjalee Fernando

    can we define an audit engagement as the initial stage of an auditing process ??

  2. Very helpful information! keep it up

  3. Informative and effective post. Carry on your post and help us to learn business them accurately so that we can enhance our knowledge in business sector.

  4. Muhammad Adil Ali Muhammad Adil Ali

    great work Jizak Allah

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