In: Accounting
Similarities between audit and review
i) Both are attestation services
ii) In both cases financial statements are the responsibility of the management.
iii) In both cases, inquiry and analytical procedures are to be
carried out.
Differences between audit and review
i) Audit gives reasonable assurance that financial statements are free from fraud and error whereas review gives only limited assurance that the financial statements are free from error
Ii)level of examination will be high in audit but it is low in case of review
iii) More time is required for conducting the audit whereas review requires only less time.
iv) Audit gives a conclusion that financial statements give a true and fair view whereas review gives a conclusion that nothing has come to our attention that leads us to believe that financial statements do not give a true and fair view
v) Audit is based on standards of auditing whereas review is based on review engagements
Vi) Due to high level of work, cost will be higher in case of audit than review.
Audit attestation service provide more assurance than review
attestation service. Audit gives a reasonable assurance to the
users that the financial statements are free from fraud and error
and also that there is no material mistatements. Detaile
examination is done in case of audit.Audit gives the users of the
financial statements higher level of confidence and helps them in
decision making.