ASRE 2410 - Review of an Interim Financial Report Performed by the Independent Auditor of the Entity - April 2006
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62 When, as a result of performing the review of interim financial report, a matter comes to the auditor’s attention that causes the auditor to believe that it is necessary to make a material adjustment to the interim financial report for it to be prepared, in all material respects, in accordance with the applicable financial reporting framework, the auditor shall communicate this matter as soon as practicable to the appropriate level of management.
63 When, in the auditor’s judgement, management does not respond appropriately within a reasonable period of time, the auditor shall inform those charged with governance.
64 Such communications are made as soon as practicable, either orally or in writing. The auditor’s decision whether to communicate orally or in writing ordinarily is affected by factors such as the nature, sensitivity and significance of the matter to be communicated and the timing of the communications. If the information is communicated orally, under paragraph 97 of this Auditing Standard, the auditor needs to document the communication.
65 When, in the auditor’s judgement, those charged with governance do not respond appropriately within a reasonable period of time, the auditor shall consider:
(a) whether to modify the report; or
(b) the possibility of withdrawing from the engagement; and
(c) the possibility of resigning from the appointment to audit the annual financial report.
66 When, as a result of performing the review of interim financial report, a matter comes to the auditor’s attention that causes the auditor to believe in the existence of fraud or non-compliance by the entity with laws and regulations the auditor shall communicate the matter as soon as practicable to those charged with governance and shall consider the implications for the review.
67 The determination of which level of management may also be informed is affected by the likelihood of collusion or the involvement of a member of management. Under paragraph 66 of this Auditing Standard, the auditor needs to report such matters to those charged with governance.
68 The auditor shall communicate relevant matters of governance interest arising from the review of the interim financial report to those charged with governance.
69 As a result of performing the review of the interim financial report, the auditor may become aware of matters that in the opinion of the auditor are both important and relevant to those charged with governance in overseeing the financial reporting and disclosure process. Under paragraph 68 of this Auditing Standard, the auditor needs to communicate such matters to those charged with governance.