The five elements:

• A three-party relationship, involving: the practitioner, a responsible party and intended users.
• Appropriate subject matter.
• Suitable criteria.
• Sufficient, appropriate evidence to support the conclusion.
• A conclusion contained within a written report.

How the elements relate to each other

Assurance engagements involve three separate parties: a practitioner, a responsible party and intended users of the assurance report. The responsible party is responsible for the information on which the practitioner is engaged to give a conclusion.

Engagements will only comply with the ISAAB's Amended International Framework for Assurance Engagements (the Framework) if there is at least one intended user of the report other than the responsible party. Acknowledgement by the responsible party for its responsibilities is essential to ensure the appropriate relationship exists between the responsible party and the practitioner, and to establish a basis for a common understanding of the responsibility of each party.

The assurance services need not necessarily include an external user as, in some circumstances, it may be appropriate to provide assurance over the client’s own operations for the client’s own use. In such cases there will be two different parties within the organisation – those responsible for the operations under scrutiny (such as management) and those ultimately responsible for the organisation (the Board). We refer to this as a three-party relationship despite there being only one organisation other than the practitioner.

The subject matter of an assurance engagement can take many forms. An appropriate subject matter is (a) identifiable, and capable of consistent evaluation or measurement against the identified criteria; and (b) such that the information about it can be subjected to procedures for gathering sufficient appropriate evidence to support a reasonable assurance or limited assurance conclusion, as appropriate.

Suitable criteria are necessary because they provide the frame of reference for a reasonably consistent evaluation or measurement of a subject matter.

What constitutes suitable criteria will depend on the engagement circumstances – in some circumstances they may be identified by law or regulation, in others they may be specifically designed to meet the needs of specific intended users. Suitable criteria exhibit the following characteristics: relevance, completeness, reliability, neutrality and understandability.