Review Engagement Example
Review Engagement is also known as the limited assurance where auditors review the financial statement after the accountant has audited. The auditor only provides a low-level assurance over the company’s financial statement.
The auditor performs fewer procedures and reviews to support a conclusion on the financial statements in terms of whether anything has come up which would indicate these are not prepared according to with accounting standards.
The key difference between a review and an audit is the level of assurance that auditors provide to users. A review engagement provides less accountability than full audits, but it also provides a level of assurance over the financial report.
The auditor will state whether they found anything in the company’s records to indicate that its financial reports are not being presented true and fair. The auditor must disclose any information during the engagement that causes them to believe financial statements do not present a true and fair view
The security exchange regulator requires that financial statements be reviewed by external auditors. The best example of review engagement would be an audit form submitted to the client’s company in order for them to accept these submissions as true representations of their own finances and operations.
Auditor only reviewed the quarterly report of the company before submitting it to the securities and exchange commission. After the review, the auditor will state if any serious issue come to their attention and it impacts the true and fair of financial statements.
The audit will only perform a few procedures in normal cases. The assurance they provide to those financial statements is also limited.
The opinion of the auditor is that nothing comes to their attention, in all material respects, to present your company’s financial statements as true or fair.
Review Engagement Vs. Audit Engagement
|Review Engagement||Audit Engagement|
|The auditors provide a low level of assurance over the financial statement.||Auditors issue the audit opinion if the financial statements are present with a true and fair view.|
|Auditors are not required to understand and test the client’s internal control.||Auditors require to understand the client’s business and internal control.|
|Auditors spend less time in review engagement as they only perform the analytical procedures.||Auditors need to spend a huge time performing variable testing procedures|