ExpertEasy1 markMultiple Choice
CPA · Question 58 · Area 4: Reporting
Which of the following is a key difference between a Review engagement and an Audit engagement?
Which of the following is a key difference between a Review engagement and an Audit engagement?
Answer options:
A.
A review requires an understanding of internal control, while an audit does not.
B.
A review provides limited assurance, while an audit provides reasonable assurance.
C.
A review involves corroborating evidence with third parties, while an audit does not.
D.
A review requires independence, while an audit does not.
How to approach this question
Audit = High Assurance (Reasonable). Review = Moderate Assurance (Limited).
Full Answer
B.A review provides limited assurance, while an audit provides reasonable assurance.✓ Correct
A review provides limited assurance, while an audit provides reasonable assurance.
A review engagement is designed to provide limited assurance (negative assurance) that no material modifications are needed. An audit provides reasonable assurance (high but not absolute) through more extensive procedures.
Common mistakes
Thinking reviews require internal control testing (they don't).
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