In dealing with a request to convert an examination to a review due to cost concerns, the auditor would primarily:

• A. Expand the scope to cover additional areas.
• B. Grant the client request and move to a review.
• C. Withdraw from the engagement.
• D. Issue a qualified opinion.

Answer: (B)

When a client asks to convert an examination to a review because of cost concerns, the main idea is to adjust the engagement to a lower level of assurance that still meets the client’s objective. A review provides limited assurance and requires noticeably less work than an examination, since it relies on inquiry and analytical procedures rather than extensive substantive testing. This makes it a cost-effective option while still giving users some level of assurance about the subject matter.

Choosing a review aligns with the client’s goal of reducing expenses while maintaining report usefulness. It’s done only with the client’s agreement and when the intended use of the engagement remains appropriate. In contrast, expanding the scope would increase costs, withdrawing would avoid delivering any assurance, and issuing a qualified opinion would signal problems with the engagement or evidence rather than simply adjusting the engagement level.