IntroductionIntroduction

Introduction

3 The purpose of this Auditing Standard is to establish mandatory requirements and to provide explanatory guidance on the auditor’s professional responsibilities when an auditor undertakes an engagement to review an interim financial report of an audit client, and on the form and content of the auditor’s review report. The term “auditor” is used throughout this Auditing Standard, not because the auditor is performing an audit function but because the scope of this Auditing Standard is limited to a review of an interim financial report performed by the independent auditor of the financial report of the entity.

4 For purposes of this Auditing Standard, an interim financial report is a financial report that is prepared in accordance with an applicable financial reporting framework[1] for a period that is shorter than the entity’s financial year.

(a) A financial report is a complete financial report which ordinarily includes accompanying notes and an assertion by those responsible for the financial report. The requirements of the applicable financial reporting framework determine the form and content of the financial report and what constitutes a complete financial report. For example, a financial report, as defined under section 303 of the Corporations Act 2001 consists of financial statements for the half-year, notes to the financial statements and the directors’ declaration about the statements and notes.

(b) A financial report is prepared in accordance with a financial reporting framework that is designed to achieve fair presentation.

5 The auditor who is engaged to perform a review of a financial report shall perform the review in accordance with this Auditing Standard.

6 Through performing the audit of the annual financial report, the auditor obtains an understanding of the entity and its environment, including its internal control. When the auditor is engaged to review the interim financial report, under paragraph 19 of this Auditing Standard, the auditor needs to update this understanding through enquiries made in the course of the review, to assist the auditor in focusing the enquiries to be made and the analytical and other review procedures to be applied. A practitioner who is engaged to perform a review of an interim financial report, and who is not the auditor of the entity, does not perform the review in accordance with ASRE 2410, as the practitioner ordinarily does not have the same understanding of the entity and its environment, including its internal control, as an auditor of the entity.

6(a) This ASRE is directed towards a review of an interim financial report by an entity’s auditor. It is also to be applied when an entity’s auditor undertakes an engagement to review a financial report comprising historical financial information.

7 Where in rare and exceptional circumstances, factors outside the auditor’s control prevent the auditor from complying with a relevant mandatory requirement in this Auditing Standard, the auditor shall:

(a) if possible, perform appropriate alternative procedures; and

(b) document in the working papers:

(i) the circumstances surrounding the inability to comply;

(ii) the reasons for the inability to comply; and

(iii) justification of how alternative procedures achieve the objectives of the mandatory requirement.

When the auditor is unable to perform appropriate alternative procedures, the auditor shall consider the implications for the auditor’s review report.