Reporting on other assignments

Advanced Audit and Assurance (AAA) · ACCA · 8 min read · Updated: 4 Nov 2026

Reporting on Other Assignments

In the Advanced Audit and Assurance (AAA) exam, candidates must know how to report on non-audit assurance and related services engagements. While an external audit of historical financial statements under ISA 700 (Revised) produces an independent auditor's report expressing reasonable assurance in positive terms, reporting on other assignments requires distinct structures, phrasing, and levels of assurance governed by specific standards such as ISAE 3000 (Revised), ISAE 3400, ISRE 2410, and ISRS 4400 (Revised).

1. The Assurance Report Compared with an Auditor's Report

An assurance report on a non-audit assignment differs fundamentally from an independent auditor's report on historical financial statements in several key elements:

• Title and Addressee: An audit report is typically addressed to the shareholders of the entity. In other assignments, the report is frequently addressed to a specific intended user, such as management, prospective acquirers, or a lending bank, and often includes a restriction on distribution or third-party reliance.
• Identification of Subject Matter and Criteria: An auditor's report identifies the financial statements and the applicable financial reporting framework (e.g., IFRS Accounting Standards). An assurance report identifies the underlying subject matter (or subject matter information) and the specific suitable criteria used to evaluate it (e.g., agreed KPIs, specific environmental protocols, or management assumptions).
• Summary of Work Performed: A major distinction occurs in limited assurance engagements. Under ISAE 3000 (Revised) and ISRE 2410, the report must include a summary of the work performed so that the user understands the nature and extent of procedures (predominantly inquiry and analytical procedures). In contrast, an ISA 700 (Revised) report contains only a standardised description of auditor responsibilities.
• Attestation vs Direct Engagements: In an attestation engagement, a party other than the practitioner evaluates the subject matter against criteria and presents an assertion or report, upon which the practitioner concludes. In a direct engagement, the practitioner directly evaluates or measures the subject matter against criteria and presents the resulting findings or conclusion directly in the report.
• Conclusion vs Opinion: An audit report expresses an 'opinion' conveying reasonable assurance. An assurance report on a review expresses a 'conclusion' conveying limited assurance in negative phrasing.

2. Formulating the Conclusion: Levels of Assurance

Understanding the distinction between assurance levels and their wording is essential for AAA:

• Reasonable Assurance (Positive Form): A high, but not absolute, level of assurance. The practitioner states a positive opinion, for example: 'In our opinion, the subject matter information is prepared, in all material respects, in accordance with the applicable criteria.'
• Limited Assurance (Negative Form): A meaningful level of assurance that is lower than reasonable assurance. The practitioner states a negative conclusion, for example: 'Based on the procedures performed and evidence obtained, nothing has come to our attention that causes us to believe that the subject matter information is not prepared, in all material respects, in accordance with the applicable criteria.'
• Non-Assurance Engagements: In an agreed-upon procedures engagement under ISRS 4400 (Revised), the practitioner provides no assurance and expresses no opinion or conclusion; the report sets out solely the agreed factual findings. In a compilation engagement under ISRS 4410 (Revised), the accountant assists management in preparing financial information without verifying or providing assurance on that information.

3. The Report on an Examination of Prospective Financial Information (ISAE 3400)

Prospective financial information (PFI) consists of forecasts (based on best-estimate assumptions) or projections (based on hypothetical assumptions). Because future events cannot be verified with certainty, reporting on PFI carries unique requirements under ISAE 3400:

• Management Responsibility: The report must explicitly state that management is responsible for the PFI, including the assumptions upon which it is based.
• Standards Statement: A statement that the examination was performed in accordance with ISAE 3400.
• Two-Part Conclusion: The report contains two distinct conclusion statements:
1. Negative assurance on assumptions: A statement that nothing has come to the practitioner's attention causing them to believe that the assumptions do not provide a reasonable basis for the PFI.
2. Positive conclusion on preparation: An opinion that the PFI is properly prepared on the basis of the assumptions and presented in accordance with the relevant financial reporting framework.
• Mandatory Cautionary Warning: The report must include a prominent warning stating that actual results are likely to be different from the forecast, because expected events frequently do not occur as expected and the variation may be material.
• Hypothetical Warning for Projections: When examining a projection, the report must state clearly that the projection has been prepared using a set of hypothetical assumptions about future events that may or may not occur, and caution users against using the projection for purposes other than intended.

4. Modifying the Conclusion in Other Assignments

Just as an auditor's report under ISA 705 (Revised) can be modified, the conclusion in an assurance engagement must be modified when specific adverse circumstances arise.

Circumstances Leading to Modification:
• Material Misstatement of the Subject Matter: Where the subject matter information is materially inconsistent with the criteria, contains unreasonable assumptions, or is misleadingly presented.
• Scope Limitation: Where the practitioner is unable to obtain sufficient appropriate evidence to form a conclusion.

Forms of Modification under ISAE 3000 (Revised) and ISRE 2410:
• Qualified Conclusion: Issued when the effect of a misstatement or scope limitation is material but not pervasive. For limited assurance, the report states that 'except for' the effects (or possible effects of a scope limitation), nothing has come to the practitioner's attention; a reasonable-assurance qualification uses positive-form wording.
• Adverse Conclusion: Issued when a misstatement of the subject matter is both material and pervasive. The practitioner concludes that the subject matter information is not prepared, in all material respects, in accordance with the applicable criteria.
• Disclaimer of Conclusion / Withdrawal: Issued when a scope limitation is material and pervasive, preventing the practitioner from obtaining sufficient appropriate evidence. The practitioner states that they do not express a conclusion on the subject matter information, or withdraws from the engagement where legally and practically permissible.

Modifications Specific to ISAE 3400 (PFI):
• If one or more significant assumptions do not provide a reasonable basis for the PFI, the practitioner must express an adverse opinion or withdraw. If presentation and disclosure are inadequate, a qualified or adverse opinion, or withdrawal, is appropriate.
• If examination procedures are restricted by management or circumstances (scope limitation), the practitioner must issue a disclaimer of opinion describing the scope limitation, or withdraw.

5. Reporting Considerations across Specific Non-Audit Engagements

• Interim Financial Information (ISRE 2410): The review report expresses limited assurance using negative wording. If there is a material departure from the applicable financial reporting framework, a qualified or adverse conclusion is required. If a material uncertainty relating to going concern exists, an explanatory paragraph is included.
• Due Diligence: Typically executed as an agreed-upon procedures assignment under ISRS 4400 (Revised). The report outlines specific procedures agreed with the client (e.g., analysing aged receivables or contingent liabilities), states factual findings without an assurance conclusion, and identifies its intended purpose and users; distribution or use may be restricted where appropriate.
• Forensic Audits: The output is an expert investigative report rather than a standardised assurance opinion. It provides an extensive narrative detailing the mandate, background, methodologies, chain of custody for evidence, quantification of losses, and factual findings designed to withstand judicial scrutiny.
• Sustainability and ESG Information: Governed by ISAE 3000 (Revised) (and ISSA 5000). The report clearly states whether limited or reasonable assurance is provided on specific performance measures, identifies the benchmark criteria (such as GHG Protocol or GRI standards), and outlines work performed on data integrity.

Common Pitfalls to Avoid in the Exam

• Confusing the Levels of Assurance: An interim review gives limited assurance expressed negatively. A PFI report normally gives negative assurance on the assumptions and a positive opinion on proper preparation; ISAE 3400 also permits positive assurance on assumptions when an appropriate level of satisfaction has been obtained.
• Omitting the Cautionary Statement on PFI: In any question requiring the critique or drafting of a PFI report under ISAE 3400, marks are awarded for identifying whether the mandatory warning regarding actual results differing from forecasts is present.
• Assuming Due Diligence Provides Assurance: Due diligence reports usually report factual findings without providing assurance. Do not suggest giving a negative assurance conclusion unless the terms of engagement explicitly require a review under assurance standards.
• Failing to Identify the Addressee and Restriction of Distribution: Reports on other assignments are rarely intended for the general public. Always discuss whether the report should contain a restriction of use or distribution clause to manage liability.

Summary of Reporting Frameworks

Assignment: Interim Review
Governing Standard: ISRE 2410
Assurance Level: Limited assurance
Reporting Format: Negative conclusion ('Nothing has come to our attention...')

Assignment: Prospective Financial Information (PFI)
Governing Standard: ISAE 3400
Assurance Level: Limited assurance on assumptions; positive conclusion on proper preparation
Reporting Format: Two-part conclusion plus mandatory cautionary statement on future variance

Assignment: Due Diligence / Agreed-Upon Procedures
Governing Standard: ISRS 4400 (Revised)
Assurance Level: No assurance
Reporting Format: Report of factual findings based on specified procedures

Assignment: General Non-Historical Financial Information Assurance
Governing Standard: ISAE 3000 (Revised)
Assurance Level: Reasonable or Limited assurance
Reporting Format: Positive opinion (reasonable) or negative conclusion (limited), with summary of procedures for limited assurance

References

Quick check

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Open each question to check the key ideas from this chapter.

How does the intended audience and distribution of an assurance report on a non-audit assignment typically differ from an external audit report under ISA 700 (Revised)?

While an audit report is addressed broadly to shareholders, non-audit assurance reports are usually addressed to specific intended users (such as management or lenders) and often contain restrictions on distribution or third-party reliance.

What is the key difference between an attestation engagement and a direct engagement under assurance frameworks?

In an attestation engagement, another party evaluates the subject matter against criteria and the practitioner concludes on that evaluation; in a direct engagement, the practitioner directly measures the subject matter and presents findings or conclusions.

How do the conclusions expressed in reasonable assurance engagements differ from those in limited assurance engagements?

Reasonable assurance is expressed positively as an opinion, whereas limited assurance is expressed negatively as a conclusion stating that nothing has come to the practitioner's attention.

What type of output does a practitioner provide in an agreed-upon procedures engagement under ISRS 4400 (Revised)?

The practitioner provides a report setting out solely the agreed factual findings, providing no assurance and expressing no opinion or conclusion.

What are the two components of the practitioner's conclusion in a report on prospective financial information under ISAE 3400?

The report includes negative assurance on whether the assumptions provide a reasonable basis, and a positive opinion on whether the PFI is properly prepared and presented based on those assumptions.

What mandatory cautionary statement must be included in an ISAE 3400 report on prospective financial information?

A prominent warning stating that actual results are likely to be different from the forecast because expected events frequently do not occur as expected, and the variation may be material.

When must a practitioner issue an adverse conclusion under ISAE 3000 (Revised) or ISRE 2410?

An adverse conclusion must be issued when a misstatement of the subject matter information is both material and pervasive.

What modification must a practitioner make under ISAE 3400 if one or more significant assumptions do not provide a reasonable basis for the prospective financial information?

The practitioner must express an adverse opinion or withdraw from the engagement.

What level of assurance and standard report format apply to an interim financial information review under ISRE 2410?

An interim review provides limited assurance expressed in a negative format stating that nothing has come to the practitioner's attention indicating a material departure from the framework.

Why is it generally inappropriate to provide an assurance conclusion in a standard due diligence report?

Due diligence is typically an agreed-upon procedures engagement (ISRS 4400) focused on reporting specific factual findings rather than expressing an assurance opinion or conclusion.

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