A scholarly review forces you to go over your work and make sure that it meets the high standards that will be applied to your work throughout graduate school and beyond.
A scholarly review allows you to connect with multiple members of your department and have them look at your work. Professors who express interest in your work at this point may be mentors, advisers or employers somewhere down the line.
A scholarly review covers your work--but it also covers how your work fits into the larger existing body of scholarly work on that subject. It forces you to know where your work stands in relation to the overall field.
Just as would happen if you submitted a work for publication, your work is read by faculty members who are knowledgeable in the field. They check your work's accuracy and insight as well as the degree of original thought and research it contains.
Your faculty adviser is your greatest resource in preparing for such a review and can help explain what the department hopes to see from you over the course of the review as well as what the school considers most important about the review.