Review Engagement Audit

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Review Engagement Audit

Review engagement services involve the independent examination of financial statements to provide limited assurance on their accuracy and compliance with accounting standards. Unlike audits, review engagements do not require the auditor to obtain extensive evidence or perform detailed testing. Instead, they involve analytical procedures, inquiries, and discussions with management to assess whether the financial statements appear reasonable.

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1. Objective: The primary objective of a review engagement is to assess the plausibility of financial statements and provide a moderate level of assurance that they are free from material misstatement. However, the level of assurance provided is lower than that of an audit.
2. Procedures: During a review engagement, the accountant performs analytical procedures and inquiries to obtain a general understanding of the organization’s business activities, financial transactions, and accounting policies. While the procedures performed are less rigorous than in an audit, they are more involved than those in a compilation.
3. Analytical Procedures: Accountants use analytical procedures to compare financial data over time, assess relationships between different financial elements, and identify any unusual fluctuations or inconsistencies that may require further investigation.

4. Inquiries: Accountants conduct inquiries with management and other relevant personnel to obtain explanations, clarifications, and additional information regarding the financial statements, accounting practices, and significant transactions.
5. Limited Assurance: Unlike audits, which provide a high level of assurance on financial statements, review engagements provide limited assurance. This means that the accountant expresses a conclusion that based on the review, they are not aware of any material modifications that should be made to the financial statements for them to be in conformity with the applicable financial reporting framework.
6. Report: Upon completion of the review engagement, the accountant issues a report expressing their conclusion on the financial statements. The report typically includes a statement that the review was conducted in accordance with applicable standards, a description of the procedures performed, and the accountant’s conclusion regarding the financial statements.

7. Scope Limitations: It’s essential to note that review engagements do not provide absolute assurance, as they involve a limited scope of work and do not include the same level of verification and testing as audits. Therefore, users of the financial statements should understand the limitations of a review engagement when relying on the accountant’s report.
Overall, review engagements provide stakeholders with a degree of confidence in the reliability of financial statements while offering a cost-effective alternative to audits for entities that do not require a higher level of assurance. They serve as a valuable tool for management, investors, lenders, and other users of financial information in making informed decisions.

Review engagement services provided by Chartered Accountants involve the independent examination of financial statements to provide limited assurance on their accuracy and compliance with accounting standards. Unlike audits, review engagements do not require the auditor to obtain extensive evidence or perform detailed testing. Instead, they involve analytical procedures, inquiries, and discussions with management to assess whether the financial statements appear reasonable.

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We, At Singh Suri & Company, Chartered Accountants Firm provide this Assurance service and keeps serving our clients

1. Analytical Procedures: We performs analytical procedures to assess the reasonableness of financial information and to identify any significant fluctuations or inconsistencies that may require further investigation. These procedures involve comparing financial data to historical trends, industry benchmarks, and expectations based on the auditor’s knowledge of the client’s business.
2. Inquiries and Discussions: We communicates with management to obtain an understanding of the company’s operations, financial reporting processes, and significant accounting policies. This may involve inquiries about changes in the business, accounting treatments, and other relevant matters. Discussions with management provide additional insights and help the auditor assess the reliability of the information provided.

3. Assessment of Financial Statements: Based on the procedures performed, We evaluates whether the financial statements are prepared in accordance with the applicable financial reporting framework, such as Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS). The auditor provides limited assurance that the financial statements are free from material misstatement, but the level of assurance is lower compared to an audit.
4. Review Engagement Report: Upon completion of the review engagement, We issues a report expressing their conclusion on the financial statements. The report typically includes a statement that the review engagement was conducted in accordance with applicable standards, a description of the procedures performed, and the auditor’s conclusion on whether anything has come to their attention that would indicate the financial statements are not prepared in accordance with the applicable financial reporting framework

Review engagement services are often chosen by entities that require some level of assurance on their financial statements but do not need or cannot afford a full audit. These engagements provide stakeholders, such as investors, creditors, and regulators, with a level of confidence in the reliability of the financial information while being more cost-effective than audits.