PHILIPPINE FRAMEWORK FOR ASSURANCE ENGAGEMENTS

1. The Framework does not itself establish standards or provide procedural requirements for the

performance of assurance engagements.

2. In addition to the Framework and PSAs, PSREs and PSAEs, practitioners who perform assurance

engagements are governed by:

● The Philippine Code of Ethics for Professional Accountants; and

● Philippine Standards on Quality Control (PSQCs)

ASSURANCE ENGAGEMENTS

1. “Assurance engagement” means an agreement in which a particular expresses a conclusion

designed to enhance the degree of confidence of the intended users other than the responsible

party about the outcome of the evaluation or measurement of a subject matter against criteria.

2. “Subject matter information” refers to the outcome of the evaluation or measurement of a

subject matter.

3. In some assurance engagements, the evaluation or measurement of the subject I performed by

the responsible party, and the subject matter information is in the form of an assertion by the

responsible party that is made available to intended users (assertion-based engagements).

4. In other assurance engagements, the practitioner either directly performs the evaluation or

measurement of the subject matter, or obtains a representation from the responsible party that

2has performed the evaluation or measurement that is not available to the intended users in the

assurance report (direct reporting engagements)

TWO TYPES OF ASSURANCE ENGAGEMENT

1. Reasonable assurance engagement – the objective is a reduction in assurance engagement risk

to an acceptably low level in the circumstances of the engagement as the basis for a positive

form of expression of the practitioner’s conclusion.

2. Limited assurance engagement – the objective is a reduction in assurance engagement risk to a

level that is acceptable in the circumstances of the engagement, but where the risk is greater

than for a reasonable assurance engagement, as a basis for a negative form of expression of the

practitioner’s conclusion.