Difference WikiAccounting

Difference Between Audit and Review

Main Difference

The main difference between Audit and Review is that Audit is providing a realistic level of assurance, whereas Review is a report on the credibility of the financial statement.

Audit vs. Review

An audit is a reasonable level of assurance in the form of an affirmative report, whereas review is the probability of the fiscal statement. Audit mentions to organizing and the quick investigation of the books of accounts of an organization to check whether they are presenting an accurate and fair report or presenting a false and unfair report. The review is mentioning to the calculation of the monetary books that are directing by the assessors of the company to define that there is any chance of variations or not.

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An audit is a systematic inspection of the financial information of an association, while the review is knowing as proper information of the monetary report to introduce the change. The level of assurance in the case of an audit is reasonable, while the level of the reliability in the case of the review is temperate. In the case of the audit, the audit report is providing a positive guarantee statement, whereas in the case of the review report is providing the negative guarantee statement.

The whole process of the audit is highly cost effected, whereas the entire process of the review is comparatively low cost forced. The method of the audit is a reasonable assurance process, while the operation of the review is the limited assurance process. The main object of the audit work is detailed testing and verifying the balances, while the primary purpose of the review is to inquire and analyzing details. An audit is assuming the higher level of inspection, whereas the review is not requiring a registered company auditor.

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Comparison Chart

AuditReview
It is defining a realistic level of assurance.It is the report of the financial statement.
Reporting On
Sensible levelProbabilities
Statements
PositiveFinancial
Investigate About
Fair and unfair reportChances of variations
Way of Inspection
SystematicAccurate
Level of Guarantee
JudiciousTemperate
Guarantee Report Declaration
PositiveNegative
Cost
HighLow
Objective
Verification of balances in detailsInquiries and analyses
Time Consumes
MoreLess

What is an Audit?

An audit is presenting a deep level of assurance in the form of an affirmative report. An audit process is declaring to the organizing and the rapid search of the books of accounts of an association to check whether they are offering proper and impartial report or offering improper and partial release. It is an accurate assessment of the fiscal material of an association. The level of the promise in the case of an audit is sensible. In the case of the audit, the audit report is providing a constructive guarantee statement.

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The entire procedure of the audit is very much cost effected; the process of the audit is a reasonable assurance process; the principal object of the audit work is exhaustive testing and validating the balances. It supposes to a higher level of inspection. It resolves to deliver the high level of comfort to the separate parties such as creditors, and the depositors of an individual’s financial statements.

The audit defines as equitable and impartial consideration of the monetary statements and the records. There is the two leading abject of an audit, the first principal object is to decide the position of the financial report, whether it is representing accurate and fair view, and the second key objective is to identify whether there are any errors or frauds. There are two categories of audit, the first one is an internal audit that is performing by the workers of the same organization, and the second one is an external audit, in this audit the company carries out the external auditors.

What is the Review?

The review is reporting on the possibility of the financial report, the review is declaring to the calculation of financial accounts that are guiding by evaluators of the corporation to describe that there is any chance of variations or not. The review expresses as appropriate information of the economic report to introduce the change, the level of the assurance in the case of the review is moderate. In the case of the review, the appraisal report is providing an adverse guarantee statement.

The whole process of the review is relatively low cost effected. The method of the review is the narrow assurance process, and the main object of the review is inquiring and analyzing details, the review is not requiring a registered company auditor. The review process is containing the analysis and inquiries about the finance, it also creates some investigation relating to the accounting and the business, and it also performs the investigative methods to recognize the present year and past year balances.

To demeanor a review, the auditor is not necessary to have ample information on the inner control system of the corporation and also distinguishing the inspection techniques. Additionally, the review arrangement is depending on the methodical procedure, and inquiries are carrying out by the auditor. A review does not require carrying out by a registered firm auditor; only their superior experience in this main thing means the better charge is supplying from the review. In simple and easy meaning that if a company is requiring a review, they also have to appoint an autonomous accountant.

Key Differences

  1. An audit is a realistic level of assurance, whereas review is the report of the financial statement.
  2. The audit is reporting on a reasonable level; on the other hand, the review is reporting on the probabilities.
  3. Audit accounts are positive; conversely, review accounts are financial.
  4. The audit is investigating about the fair and unfair reports; on the flip side, the review is studying about the chances of variations.
  5. The way of inspection of an audit is systematic, whereas the method of examination of review is accurate.
  6. The level of the guarantee of an audit is accurate; on the other hand, the level of the assurance of the review is temperate.
  7. The assurance report of the audit is declaring a definite statement; on the flip side, the assurance of the review is maintaining an unfavorable report.
  8. The audit process is a high cost effected procedure; on the other hand, the review is a low cost effected procedure.
  9. The audit process takes more time; conversely, the review process takes less time.
  10. The objective of the audit is verifying of balance in detail; on the flip side, the aim of the review is inquiring and analyzing.

Conclusion

An audit process is a more precarious and systematic procedure as related to a review. In an audit, the auditor should control full awareness of the accounting process and the inner control system. To consider the legally, an audit is compulsory in the businesses; however, the review is optional.