What is unique about Reviewed statements?

What is unique about Reviewed statements?

• A. Confirm authenticity
• B. Inquire internally
• C. Analysis is performed
• D. Conducted in accordance GAAS

Answer: (C)

In a reviewed engagement, the defining step is that analysis is performed. The auditor relies on analytical procedures and inquiries of management to form limited (negative) assurance that the financial statements are reasonable and free from obvious misstatement. This contrasts with a full audit, which uses extensive tests of details and substantive procedures. So the unique aspect here is applying analytical procedures to evaluate the statements. The other options don’t capture this defining procedure: while inquiries are used, they’re part of the process and not the sole distinguishing feature; confirming authenticity isn’t the hallmark of a review; and conducting engagements in accordance with GAAS is true for many types of attest engagements, not unique to reviews.

In a reviewed engagement, the defining step is that analysis is performed. The auditor relies on analytical procedures and inquiries of management to form limited (negative) assurance that the financial statements are reasonable and free from obvious misstatement. This contrasts with a full audit, which uses extensive tests of details and substantive procedures. So the unique aspect here is applying analytical procedures to evaluate the statements. The other options don’t capture this defining procedure: while inquiries are used, they’re part of the process and not the sole distinguishing feature; confirming authenticity isn’t the hallmark of a review; and conducting engagements in accordance with GAAS is true for many types of attest engagements, not unique to reviews.