A review consists primarily of gathering information through
A)analytical procedures and inquiries of individuals responsible for accounting decisions
B)substantive tests and observations of individuals responsible for accounting decisions
C)tests of controls and inspections of documentation
D)policies and procedures and business activity

Question

Quizplus · Accepted Answer

A review primarily involves analytical procedures and inquiries of individuals responsible for accounting decisions. This is done to provide a limited level of assurance that the financial statements are free of material misstatement. Substantive tests and observations are typically a part of an audit, which provides a higher level of assurance. Tests of controls and inspections of documentation are also typically part of an audit rather than a review. Policies and procedures and business activity may be considered as part of a review, but they are not the primary focus.

A Review Consists Primarily of Gathering Information Through