Two PAs are discussing review engagements. A: As I see it, in a review we are providing a lower…

Two PAs are discussing review engagements. A: As I see it, in a review we are providing a lower level of assurance, so we don’t need the same extent of knowledge of the client’s business and industry as we do in an audit. B: That seems to be what the profession’s review standards imply. But, at the same time, performing a review requires us to develop a “plausibility framework” that involves using enquiries and analytical procedures to assess whether the information being reported on is plausible in the circumstances. I don’t see how this can be done unless I have an in-depth understanding of the client’s business and its industry. To me this seems logically inconsistent: knowledge of the business and industry is critical in doing a review effectively, so how can I do a review with less knowledge than I need for an audit? And how do I know how much knowledge is “enough”? A: I see your point. In some ways it seems knowledge of business is MORE critical in a review, not less, because in the audit you can rely on evidence. In a review you have to do it all by judgment. B: And then, to make it even more confusing, there is also the “strategic systems approach” to auditing that some auditors use; that seems to rely heavily on gathering knowledge of the business, its strategy, and its industry environment, but less on gathering hard, transaction-based audit evidence. So how does an SSA audit differ from a review? Required: Discuss the differences between these types of enga

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