Engagement Essentials

Chapter 7PERFORMING REVIEW ENGAGEMENTS

LEARNING OBJECTIVES

After completing this chapter, you should be able to do the following:

•    Identify the general principles and objective of review engagements.

•    Recognize the elements that comprise review engagements.

•    Identify the performance standards for a review engagement.

•    Recognize the documentation requirements for a review engagement.

•    Recognize the effects of a change in level of service from an audit to a review.

Review General Principles and Objective

This section provides an overview of the objective and elements of review engagements. It includes a discussion of materiality considerations.

OBJECTIVE

The objective of the accountant when performing a review of financial statements is to obtain limited assurance as a basis for reporting whether the accountant is aware of any material modifications that should be made to the financial statements for them to be in accordance with the applicable financial reporting framework, primarily through the performance of inquiry and analytical procedures. In order to conclude that he or she has obtained limited assurance, the accountant is required to accumulate review evidence through the application of procedures, including inquiry and analytical procedures, supported by a management representation letter. The accountant is required to evaluate whether sufficient appropriate review evidence has been obtained from the procedures performed and, if not, the accountant ...