What is an audit?

An audit is the examination of the financial report of an organization - as presented in the annual
report - by someone independent of that organization. The financial report includes a balance
sheet, an income statement, a statement of changes in equity, a cash flow statement, and notes
comprising a summary of significant accounting policies and other explanatory notes. OR
An audit is an exercise designed to enable an auditor to express an opinion whether the
financial statements are prepared, in all material respect, in accordance with an applicable
financial reporting framework.

What is Assurance?
An assurance engagement is one in which a practitioner 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 of a subject matter against a criteria.

Difference between audit and assurance?

Audit
An audit engagement is an assurance
engagement.
Audit is the general evaluation of an
organization, system, process, project or
product, and can be performed by both
internal and external auditors
Audit engagement provides reasonable
assurance.

Assurance
But all assurance engagements are not audits.

Rights and liabilities of the auditor in audit

engagement are higher.

Rights and liabilities of assurance engagement

are lower.

Assurance usually refers to the "external" or

attestation function. This is usually provided by
accounting or auditing firms. Assurance
provides an independent opinion.
Assurance engagements can be reasonable
assurance engagements, limited assurance
engagements or other assurance engagements.

Both audit and assurance are discussed in BSAs 200 & 210