Third Party Reviews: Limited and Reasonable

What is the difference between a limited  and a reasonable assurance?

Most assurance standards provide for two levels of assurance:

  • Limited assurance, also referred to as “negative” assurance (lower level of assurance)
  • Reasonable or moderate assurance,  also referred to as “positive” assurance (higher level of assurance).

Both limited and reasonable assurance can be carried out on either the entire set of reported indicators in a report or on a narrower set of selected indicators.  If a narrower set is assured, the organization will provide some indication, such as a list, mark, or star, to clarify the level of assurance for each indicator.

Type of Assurance Limited Assurance Reasonable Assurance
What other names are used? Also called negative assurance Also called positive assurance
What wording is used? Includes the words “nothing has come to our attention that would cause us to believe the information is not accurate in all material aspects …” Includes the words “in our opinion, the reported information has been presented fairly in all material respects.”
What is done? Consists of interviews and analytic testing.

May perform assessments of the data management processes and related controls.

Consists of the same procedures that are used in a limited assurance; however, more thorough and detailed checking of the data and tests of the data management processes are performed thereby increasing the probability of providing reliable results.
Who uses it? More common in North America More common in Europe
How extensive is it? Can be carried out on an entire set or a narrower set of selected indicators

The level of assurance provided, whether limited or reasonable will differ depending on the time and effort provided by the assurance provided. A higher level of assurance requires more investigation to check for accuracy of information. More documents are checked and more interviews are carried out with management and staff. A higher level of assurance or greater confidence in the accuracy of the information, of course, is more costly to the organization requesting the assurance.