What should be focused on in a FB Ads Account review?

Great question. I do a lot of Facebook audits. What I usually focus on is:

• Is the advertiser properly utilizing all of the tools that Facebook makes available to them? eg. have they experimented with all campaign strategies (MAI, AEO, VO), have they experimented with all bid types (autobid, bid cap, cost cap, target cost, min ROAS for VO), have they experimented with CBO?
• What placements are they using? Are the creatives optimized for all placements? Is there a substantial difference between placement value, and are they pricing those placements appropriately?
• Is the advertiser pricing different campaign strategies differnetly? You'd be surprised at how often an advertiser has one single bid value for "Facebook" across AEO and VO or MAI and AEO campaigns. These campaign strategies need to be priced specifically / independently!
• Is the advertiser only targeting broadly? One mistake that I often see advertisers make -- especially when they are working with an agency that is incentivized to merely spend as much as possible -- is that they'll set up really broad, worldwide campaigns with only English language targeted and pat themselves on the back for very low CPIs. I have only ever seen Worldwide targeting with autobid and English language selected work when various countries are blacklisted (my go-to: Pakistan, India, Bangladesh, South Africa)
• How is the advertiser testing creatives? Do they have a dedicated testing campaign / testing account, or are they just dumping creatives into an active ad set? Does the advertiser test creatives in a setting that is indicative of performance in live?

To understand an account that isn't yours, at first, I try to not look at "performance" metrics", and focus on scope and funnel:
- scope: what kind of scale (amount spent, events completed), big trend over time (overall age, seasonality, recent trends.. which periods are most relevant?), geographic & OS spread, mobile UA only or also remarketing, web, promoted social...

- funnel: which events are tracked within Facebook (+which are used for AEO?). is value tracked? (and is it reliable, if often doesn't match internal numbers). What are the different step completion rate.

Once there, I do a "maturity" check
- how solid is the naming convention

- which bidding types have been used/iterated on (mainly MAI/AEO/VO, but also bidding type within)

- number of different creatives

And only then do I start looking at performance (CPI, CPA, ROAS). But to seize if I see improvement in the short/mid term, the 2 bits I put quite a lot of attention on are:
- creative performance (IPM or impression to install ratio)

- audience building, size vs budget. (see Shamanth answer)

TP

This is our high level checklist for the first things we look at:

-> Audiences(how many audiences, which audiences, how are they structured within campaigns, which geos etc.). Essentially we look for whether this is carefully thought through - and if this covers audiences with the highest purchase-propensity in key geos. Plus: we see if audience sizes are large enough to ensure delivery.

-> Creatives. What creative formats are being used. How many creatives per ad set. How many distinct value props are highlighted. How many distinct creative themes are present.

-> Bidding & economics: What KPIs are ad sets optimized for. How are ad sets doing vs. target CPA/ROAS. How is spend distributed.

Although every app is different, nearly every problem or opportunity we see has come within the ambit of the 3 areas above.