The main objective of an assurance engagement is to let the professional and independent audit firms perform their works and express their opinion based on the level of assurance that they are engaging in.
There are two common levels of assurance engagements that audit firms normally offer and provide. First is the reasonable assurance and the second is limited assurance engagement.
Reasonable assurance is normally expressed in a positive form. It is sometimes called positive assurance.
This type of assurance engagement expresses their opinion that reduces the assurance engagement risks to the acceptable low level for the subject matter that the firm is being expressed on.
For example, an audit on financial statements is an example of a reasonable assurance engagement. Auditors will express their opinion based on the result of their examinations. Those opinions will be based on a positive form.
Limited assurance engagement is normally expressed in the negative form and the best example of these types of assurance would be the review of financial statements engagements.
To explain this, for example, the entity borrows a certain amount of loan from the bank.
The bank approves the loan and as part of its requirement, the entity needs to submit its quarterly financial statements to the bank. Those financial statements need to be reviewed by a qualified auditor.
In this case, the entity needs to engage with qualified auditors to review its financial statements.
And this kind of engagement is called limited engagement. The opinion that the audit would express for this kind of engagement is in a negative form.