Reasonable assurance:
is defined by the audit community as an “acknowledgment that it is not possible to assert absolutely and certainly that an event will (or will not) occur.”  Reasonable assurance, in my opinion, means that a reasonable person would consider that the testing conducted would lead them to believe that an event would be discovered.  Why is it not possible to assert absolutely?  Because, no organization is going to pay an auditor to test every transaction.  It is not cost effective and it is not efficient. To get to reasonable assurance, an auditor develops tests and sample sizes such that the potential that any event will be likely detected.  It is how that testing should best be conducted to give the auditor reasonable assurance is where things go awry.  The problem is that not all auditors are conducting rigorous testing.  Then there is sampling.  Sampling is the key to reasonable assurance.  At the end of the day, if the samples are not appropriately picked and of the right size, then reasonable assurance cannot be achieved.  Is reasonable assurance perfect?  No.  Is there a better way to conduct audits? Probably not if you want a cost effective and efficient process.  Auditors need to step up and implement proper testing and sampling processes to better ensure that any gaps are going to be found.  Are all gaps going to be found?  No.  Auditors are human and are fallible.  However, I would like to think that the number of gaps that remain open will be few and small enough that they will not cause a huge damage.

Comments

Popular Posts