What distinguishes an audit from a review in tax practices?

The distinction between an audit and a review in tax practices centers around the level of assurance and the thoroughness of the examination conducted. An audit involves an extensive examination of financial statements and accounting records, requiring the auditor to gather sufficient evidence to form an opinion on the financial statements' accuracy and compliance with applicable standards. This process typically includes detailed testing of transactions and internal controls to provide a high level of assurance.

In contrast, a review is less intensive and focuses on analytical procedures and inquiries to provide only limited assurance. The aim is to identify any material modifications that should be made for the financial statements to conform with accounting principles, rather than to express a formal opinion as would be done in an audit.

Thus, the considerable difference lies in the level of detail and assurance provided: the extensive nature of audits compared to the more streamlined and limited approach of reviews.