Below are some key facts about Hillsburg Hardware and Ben & James, the paint manufacturer, Hillsburg is considering purchasing.

Hillsburg Hardware Limited
Hillsburg Stores Ltd. began operations in 1980 in Halifax, Nova Scotia, as a family-owned retail hardware store chain. In 1990, the company changed its name to Hillsburg Hardware Limited. In 2002, the Hillsburg family sold a controlling interest in the company to Wilkshaw Capital, an investment group. Although the Hillsburg family is no longer actively involved in operations, it maintains a minority interest in the company and receives annual dividends. In 2007, the Hillsburg family requested that the company’s financial statements be audited. The Hillsburg family became concerned with the frequent changes in the company’s top management as almost everyone the family used to know had left the company.

Ben & James
Ben & James is a family-owned private paint manufacturer. The company was established in 1978 by brothers Ben and James Moore. Both brothers and their families are heavily involved in the day-to-day operation of the company. Ben is the CEO and James’ wife, who is a CPA, is the CFO. Until 2017, the company manufactured and sold paint for indoor use only. That year, Ben and James decided to approach their local bank that they have been dealing with for the past 40 years, to obtain a loan to finance the company’s expansion into the outdoor-use paint market. The loan agreement requires Ben & James to provide the bank with annual financial statements, which have been reviewed by a public accounting firm.

REQUIRED
a. What is the difference between an audit, which provides reasonable assurance, and a review, which provides limited assurance.
b. Why would the Hillsburg family request that the company’s financial statements be audited, whereas the bank requested that Ben & James annual financial statements be reviewed?