Audit Smarter, Not Harder: The Case for Reasonable Assurance
As a firm dedicated to supporting our clients to get through audits (reasonably) unscathed, we’ve observed a common pitfall among junior auditor: the quest for absolute assurance. While the enthusiasm to deliver flawless work is admirable, this pursuit often leads to inefficiencies, frustration, stress, and the occasional overly detailed spreadsheet that even Excel finds exhausting. Let’s be clear—absolute assurance is a great idea in theory but impossible in practice.
Auditors (and yes, we’re looking at ourselves too) juggle the challenge of providing stakeholders with reliable assurance while working within practical constraints. Junior auditors, we believe, sometimes aim for perfection in an effort to avoid review notes. However, the reality is that reasonable assurance—not absolute certainty—is the foundation of effective auditing. Let’s explore why aiming for perfection is counterproductive and how embracing a more realistic approach can make audits smoother for everyone.
Reasonable assurance is the cornerstone of auditing, as outlined in the International Standard on Auditing (see references below. It’s about achieving a high level of confidence, not an absolute one. Here’s why aiming for absolute assurance is like chasing the horizon:
Financial reporting loves a little ambiguity: Judgments and estimates are an unavoidable part of financial statements. You can’t audit judgment out of existence.
Sampling is smart, not lazy: Audits rely on sampling and risk-based approaches to cover what matters most, not every penny in the piggy bank.
Resources have limits: Clients expect audits to be efficient—no one wants to audit every transaction back to the Stone Age.
Fraudsters are creative: Some schemes are designed to fly under the radar, making 100% detection unrealistic.
Junior auditors often aim for exhaustive detail to avoid managers’ notes and feedback, but this approach can lead to diminishing returns:
Wasting resources: Over-focusing on minor issues shifts attention away from the big risks.
Rising stress levels: Unrealistic expectations lead to burnout and frustration.
Client fatigue: No one wants to explain why the “office coffee” expense is on the audit radar.
Stifling professional judgment: Fear of errors can make juniors hesitant to apply critical thinking.
To guide auditors toward embracing reasonable assurance, managers and seniors should focus on these strategies:
Be an accessible mentor: Create a culture where juniors feel comfortable asking questions—even the ones they fear might sound silly.
Train on risk-based auditing: Help auditors understand materiality and how to prioritise significant risks.
Encourage a culture of constructive feedback: Feedback isn’t a critique of character; it’s a tool for improvement. Promote open dialogue and proactive discussions about challenging tasks. Pro tip: Debrief with the team after meetings to review what went well and what could improve next time.
Set realistic expectations: Reinforce the principles of reasonable assurance and focus on what truly matters in an audit. Challenge your teams to see
In conclusion, reasonable assurance, as outlined by international standards, is about striking the right balance between thoroughness and efficiency. Pursuing absolute assurance not only misaligns with these standards but also creates unnecessary stress and inefficiency. By focusing on materiality, risk-based approaches, and fostering a learning culture, audit teams can achieve high-quality results without the chaos of chasing unattainable perfection.
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What International Standards Say About Reasonable Assurance
ISA 200: Defines reasonable assurance as a high but not absolute level of confidence. The goal is to detect material misstatements, not every error.
ISA 320 (Materiality in Planning and Performing an Audit): Emphasises focusing on significant matters and risks.
ISA 530 (Audit Sampling): Advocates for sampling techniques to obtain sufficient, appropriate evidence without auditing every transaction.
