The objectives of a review in accordance with the statements on standards for accounting differ significantly with those of audit financial statements in compliance with the general accepted auditing standards. During a review the accountants will perform analytical procedures and will obtain their information from asking the management a variety of questions rather than obtaining an understanding of the internal control structures and obtaining evidential matter throughout inspection, observation or confirmation as an audit process requires. Upon completion of the process the accountants will issue an opinion providing limited assurances on the fair presentation of the financial statements. This limited assurance opinion is different from an audit opinion as it provides a lower level of assurance. Sources used: AR section 60: Professional Standards (www.aicpa.org), AU Section 150: Generally Accepted Auditing Standards (www.pcaobus.org)
In my opinion, auditor obtained third-party confirmations, reviewed available documentation, analytical procedures performed to evaluate the reasonableness of the revenues recorded on the contracts and the visited selected restoration sites are more reliable than management assertion of occurrence. Management assertions can be purposely misleading and the individuals might go to a great length to defraud the auditors and the public. In the ZZZZ Best Companies case, Barry Mirkov asserts that all financial statements are properly presented and when the auditors decide to take further auditing procedures, Barry Mirkov creates fraudulent contracts, rents real estate spaces for a few hours and hires a few phony individuals to pose as leasing agents in order to accompany auditors in their observational visits of the restoration sites, utilizing millions of dollars and affectively convincing auditors that there is no need for further investigation. The ZZZZ Best situation proves that con artists may succeed even against the most...
Please join StudyMode to read the full document