What is Direct Engagement?

Assurance engagements may include various types or forms. These engagements involve examining a subject matter. Similarly, the subject matter may differ based on the type of engagement. The party making this examination is a practitioner. During this process, the practitioner is responsible for collecting evidence. This evidence must be sufficient and appropriate. The reason for doing so is that practitioners also need to provide an opinion about the subject matter.

Therefore, collecting sufficient appropriate evidence is crucial to ensure the quality of the opinion provided. The objective of presenting this opinion is to enhance the confidence that intended users can place on the subject matter. There are several types of assurance engagements, including reasonable and limited assurance engagements. Both of these differ from each other in various regards.

What is Direct Engagement?

Direct engagement is a type of review engagement. As with other assurance engagements, direct services include a practitioner and a subject matter. In this type of engagement, the practitioner is responsible for directly evaluating the underlying subject matter against applicable criteria. It differs from other services where another party examines the subject matter.

Direct enagement, also known as direct reporting engagement, also involves a report. Reports are common to all assurance engagements. These reports state the practitioner’s opinion regarding the subject matter. For direct engagements, the reporting channel only includes the practitioner and the intended users.

In essence, it does not require the management to evaluate the subject matter. Instead, the practitioner is responsible for doing so. Once they do so, they report their progress directly. Apart from these, most of the other aspects of the engagement stay the same. The practitioner obtains sufficient appropriate evidence to express their opinion which comes in the form of a written direct assurance report.

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How do Direct Engagements differ from Attestation Engagements?

There are many differences between attestation engagement and direct engagements. The first difference comes in the form of the role of the responsible party. The responsible party in attestation engagements is responsible for measuring and evaluating the underlying subject matter. As mentioned, this occurs against suitable criteria. The party is also responsible for providing a public statement regarding the evaluation of the subject matter.

In these engagements, the responsible party is responsible for the underlying subject matter. However, they do not perform measurements or evaluations. Similarly, they do not provide a statement to an external party. Instead, they provide a written acknowledgment of responsibility for the underlying subject matter. It usually occurs through the engagement letter or representation letter.

The next difference comes in the form of the practitioner’s conclusion. There are several terms in which the practitioner can word their conclusion. These may include the underlying subject matter and the applicable criteria or a statement made by the appropriate party.

Most practitioners phrase their report in terms of the subject matter information and the applicable criteria. It helps them differentiate an attestation engagement from a direct engagement. On the other hand, the practitioner’s conclusion in a direct engagement is different. Practitioners prefer to conclude in terms of the underlying subject matter and the applicable criteria.

What are the Characteristics of Direct Engagements?

There are several features that define direct engagements. For auditors, it is crucial to understand what these are. This differentiation also helps practitioners know which standard to use to carry out their operations. The primary feature that separates direct engagements from others is the role of each party in the engagement.

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The primary focus for practitioners is to identify the party that will evaluate the subject matter against the criteria. As mentioned, if the practitioner has the responsibility, then it is a direct engagement. However, if the practitioner is not responsible, then the engagement will not fall under the definition of direct engagement.

In some instances, the responsibility may be unclear. These cases can be challenging for practitioners as they can either be a direct engagement or something else. However, there are some other tests that can help practitioners in this regard. For example, practitioners can question the responsibility for providing the criteria against which the evaluation will occur.

On top of that, practitioners also have other options to distinguish direct engagements. For that, they need to examine the responsible party’s policies and processes. If these policies suggest that the responsible party is performing the evaluation of the subject matter, then it is not a direct engagement. If not, then it will fall under the definition of direct engagement.


There are several types of assurance engagements that practitioners may offer. Most of these have similar features. Direct engagements are services that involve the practitioner evaluating the subject matter against identified criteria. These engagements differ from attestation services in various fundamental regards. There are several characteristics that define direct engagements.

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