What is one of the limited procedures that can be performed in a review engagement?

In a review engagement, the primary goal is to provide a moderate level of assurance that the financial statements are free from material misstatement. Unlike an audit, which requires a higher level of assurance and involves detailed testing of transactions and internal controls, a review engagement is more limited in scope.

Analytical procedures are a key component of a review engagement. These procedures involve evaluating financial information through analysis of plausible relationships among both financial and non-financial data. By investigating these relationships, the accountant can identify any discrepancies or areas that may require further attention.

This method is consistent with the objective of review engagements, which is to produce less detailed evidence compared to an audit while still providing some assurance. In contrast, procedures such as evaluating internal controls, extended testing of transactions, and observation of physical inventory typically go beyond the scope and requirements of a review engagement, as they demand more substantive testing and evaluation, which is not expected in this context.