Why is a review engagement not the same level of assurance as an audit?
I understand that reviews involve inquiry and analytical procedures, but I keep mixing up review reports with audit reports when answer choices talk about assurance.
A review is designed to provide limited assurance, not reasonable assurance. The accountant generally performs inquiry and analytical procedures and issues a report using negative assurance style language. The accountant is not obtaining the same depth of evidence as an audit, so the report should not say the statements are presented fairly in all material respects.
For exam purposes, put the assurance ladder in order: compilation and preparation provide no assurance, review provides limited assurance, and audit or examination provides reasonable assurance. If an answer choice turns a review into a positive opinion, it is usually overstating the engagement.
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