Question

Often banks are willing to accept either review or audit level assurance. What are the benefits and costs if a review engagement is requested instead of an audit?

Answer 1

Audit means examination and inspection of Books and accounts to give an opinion on the financial statement presented that the financial statement gives a true and fair view while a review engagement involves performance of inquiry and analytical review procedure to look whether there is any material discripancies involved and report on the same. An review engagement is preferred when discripancies and any material misstaement are to bring in knowledge of users. Difference between audit and review engagement are as follows

Particular	Review Engagement	Audit
Meaning	the auditor performs inquiry and analytical review procedures to provide a moderate level of assurance required to provide a negative assurance report.	Audit is the examination or inspection of various books of accounts by an auditor followed by physical checking of inventory to make sure that all departments are following documented system of recording transactions. It is done to ascertain the accuracy of financial statements provided by the organisation.
Cost Involved	Generally cheaper than an audit	High Cost Involved
Type of Assurance	Negative Assurance	Positive Assurance
Time	less Time Consuming	More Time Consuming