EXAMPLE OF AN ENGAGEMENT LETTER FOR A REEXAMPLE OF AN ENGAGEMENT LETTER FOR A REVIEW OF A FINANCIAL REPORT

EXAMPLE OF AN ENGAGEMENT LETTER FOR A REVIEW OF A FINANCIAL REPORT

The following letter is not intended to be a standard letter. It is to be used as a guide only and will need to be adapted according to individual requirements and circumstances. This illustrative letter is written in the context of a half‑year financial report under the Corporations Act 2001.

To [those charged with governance:[6]]

Scope

You have requested that we review the half‑year financial report[7] of [name of entity], which comprises the statement of financial position as at 31 December 20XX, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the six‑month[8] period ended on that date, and notes comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration. We are pleased to confirm our acceptance and our understanding of the terms and objectives of our engagement by means of this letter.

Our review will be conducted in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, issued by the Auditing and Assurance Standards Board, with the objective of providing us with a basis for reporting whether we have become aware of any matter [anything has come to our attention[9]] that makes [causes] us [to] believe that the half‑year financial report is not prepared, in all material respects, in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001 [indicate applicable financial reporting framework]. Such a review consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures and does not, ordinarily, require corroboration of the information obtained. The scope of a review of a financial report is substantially less than the scope of an audit conducted in accordance with Auditing Standards whose objective is the expression of an opinion regarding the financial report and accordingly, we shall express no such opinion. ASRE 2410 requires us to also comply with the ethical requirements relevant to the audit of the annual financial report of the entity.

We expect to report on the half‑year financial report[10] as follows:

[Include text of sample review report - see Appendix 3 or 4 as appropriate.]

The directors [those charged with governance[11]] of the [company/registered scheme/disclosing entity] are responsible for the preparation of the half‑year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors [those charged with governance] determine is necessary to enable the preparation of the half‑year financial report that is free from material misstatement, whether due to fraud or error. As part of our review, we shall request written representations from management concerning assertions made in connection with the review. We shall also request that where any document containing the half‑year financial report indicates that the half‑year financial report has been reviewed, our review report will also be included in the document.