Review engagement
In one sentenceA service in which the accountant examines the statements through inquiry and analytical procedures only, giving limited assurance that is less than the assurance of a full audit.
Simply put
In a review engagement the accountant does not gather much evidence or request confirmations; he asks management and analyzes the figures. That is why it costs less and takes less time.
The wording of the conclusion is different: “nothing has come to our attention that causes us to believe the statements are not presented fairly”, not “in our opinion the statements are presented fairly”.
Example
A company issues quarterly statements, so it asks its auditor for a review of each quarter, then a full audit of the annual statements at year end.
Don't confuse it with
Statutory auditAn audit gives reasonable assurance and a positive opinion, while a review gives limited assurance in negative form.