Private Entity Financial Statements : Assurances Required and Achieved

Our study investigates non-SEC practicing certified public accountants' (CPAs) quantitative assessments of the levels of assurance required and achieved in the performance of AICPA standards-based audits and reviews of non-SEC entities. Our results indicate that CPAs believe that the required level of audit assurance is lower than that illustrated in the professional standards and practice aids. In addition, CPAs believe that the achieved level of assurance in audit engagements is even lower than their assessment of the level of required assurance. The CPAs reported similar responses for the levels of assurance required and achieved in review engagements. Our results have implications for practicing CPAs as well as professional standards setters, practice regulators, and users of audited and reviewed financial statements