Audit vs Review
An audit provides reasonable assurance through extensive procedures and results in a positive opinion. A review provides limited assurance through inquiry and analytical procedures and results in a negative conclusion.
The quick answer
The difference is the level of assurance. An audit says the statements give a true and fair view. A review says nothing has come to our attention suggesting they do not.
Side-by-side comparison
| Basis | Audit | Review |
|---|---|---|
| Level of assurance | Reasonable assurance — high but not absolute | Limited assurance |
| Form of conclusion | Positive opinion | Negative conclusion |
| Procedures | Inspection, observation, confirmation, recalculation, analytical procedures | Primarily inquiry and analytical procedures |
| Evidence gathered | Sufficient and appropriate for an opinion | Less extensive, sufficient for limited assurance |
| Extent of work | Substantially greater | Substantially lower |
| Typical use | Statutory annual financial statements | Interim or quarterly financial information |
The exam angle
The examinable distinction is the wording of the conclusion. Practise writing both — a review conclusion must be expressed negatively, and using audit-opinion language in a review scenario loses marks.
Related comparisons
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Talk to usWhy is an audit only reasonable and not absolute assurance?
Because of inherent limitations — the use of sampling, the nature of accounting estimates, the possibility of collusion, and the fact that most audit evidence is persuasive rather than conclusive.
Is a review cheaper than an audit?
Yes, because the procedures are far less extensive. That is why reviews are commonly used for interim reporting where cost and timeliness matter more than the highest assurance level.
Can a review detect fraud?
It is much less likely to. A review is not designed to obtain the evidence needed for reasonable assurance, so its ability to detect material misstatement, including fraud, is correspondingly limited.
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