Limited assurance engagement: -
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.
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.
Reasonable assurance: -
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.