A review provides an organisation with a report on anything that has come to the attention that would indicate a material misstatement.
The objective of a review differs significantly from that of an audit, however both engagements are carried out according to Australian Auditing Standards. A review of a financial report does not provide a basis for expressing an opinion, nor does it obtain reasonable assurance that the report is free from material misstatement. A review consists of making enquiries of those charged with financial and accounting matters, and applying analytical and other procedures. A review may bring significant issues in the report to the auditor’s attention but does not provide all the evidence required in an audit.
The benefits of a review engagement include:
- provides an overall review of the financial statements and highlight area(s) for management’s attention
- delivers a cost-effective solution
- quicker process than conventional audit