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 second is limited assurance engagement.
Reasonable assurance normally express in the 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 being express on.
For example, an audit on financial statements is an example of the reasonable assurance engagement. Auditors will express their opinion based on the result of their examination. Those opinions will be based on a positive form.
Limited assurance engagement is normally express in the negative form and the best example for 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 form the bank.
The bank approves the loan and as part of its requirement, the entity needs to submit their quarterly financial statements to the bank. Those financial statements need to be review by the qualified auditor.
In this case, the entity needs to engage with the 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 negative form.