The practitioner, for example, considers the impact of unexpected events, changes in conditions or evidence obtained and revises the engagement strategy and plan as appropriate.

The practitioner obtains an understanding of the subject matter and other engagement circumstances, sufficient to identify and assess the risks of the subject matter information being materially misstated and sufficient to design and perform evidence-gathering procedures so as to address these risks. This understanding provides the practitioner with a frame of reference for exercising professional judgement, for example, during planning, when:

• considering the characteristics of the subject matter and how it is best approached;
• assessing the suitability of criteria; or
• determining the nature, timing and extent of procedures for gathering evidence.

The practitioner assesses the appropriateness of the subject matter and the suitability of the criteria to evaluate or measure the subject matter.

The practitioner does not accept an assurance engagement unless the practitioner’s preliminary knowledge of the engagement circumstances indicates that the subject matter is appropriate, criteria are suitable and sufficient and appropriate evidence is likely to be available.

After accepting the engagement, if the practitioner concludes that one of these aspects is not met, the practitioner may need to express:

• a qualified or adverse conclusion when the unsuitable criteria or inappropriate subject matter is likely to mislead the intended users;
• a qualified, or disclaimer of, conclusion in other cases including a scope limitation; or
• in some cases, the practitioner may consider withdrawing from the engagement.

The practitioner plans, and subsequently performs, an assurance engagement with an attitude of professional scepticism to obtain sufficient appropriate evidence which is determined in the light of the assurance engagement risk.

Assurance engagement risk needs to be reduced to an acceptably low level in the circumstances of the engagement to express the agreed type of assurance conclusion - reasonable or limited assurance. In doing so, the practitioner considers materiality, and the quantity and quality of available evidence when planning and performing the engagement, in particular when determining the nature, timing and extent of evidence-gathering procedures.

In a limited assurance engagement, the practitioner seeks to obtain less evidence than for a reasonable assurance engagement. This is in line with the conclusion which is worded to express a lesser degree of confidence for a limited assurance engagement than for a reasonable assurance engagement.

For limited assurance and reasonable assurance engagements, the practitioner needs to exercise professional judgement to determine the appropriate degree of work to gather appropriate and sufficient evidence. This may affect, for example, the nature or methods of tests carried out, the nature, type or number of locations visited; or the sample sizes to collect the evidence appropriate for the engagement.

• Read more on criteria

Finally, the scope and approach to be followed are documented, normally in the form of an engagement plan or work programme and communicated among the engagement team. It may be useful, especially in the case of a limited assurance engagement, for the practitioner to discuss various testing options with the client. However, the practitioner remains responsible for the ultimate selection of tests.