Review Engagements
A review engagement can be a cost effective and less time consuming means of providing some limited assurance on financial statements and is performed under the AICPA’s attestation standards. The review is designed to provide a moderate level of assurance, or negative assurance, of the reliability of financial statements stating that nothing has come to our attention to indicate that the financial information is not presented in conformity with GAAP.
Because the level of assurance provided by a review is lower, less work is required and consequently the cost is often significantly less than an audit. Both review engagements and audits require the financial statements to be prepared in conformity with GAAP but review procedures consist of inquiries and analytical procedures and it is not normally necessary to obtain independent confirmations or apply inspection or observation procedures. However, these types of procedures are not prohibited and can be efficient in some situations.