ASRE 2410 - Review of an Interim Financial Report Performed by the Independent Auditor of the Entity - April 2006
Limitation on Scope Imposed by ManagemenLimitation on Scope Imposed by Management
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Limitation on Scope Imposed by Management
78 Unless required by law or regulation, an auditor shall not accept an engagement to review an interim financial report when management has imposed a limitation on the scope of the auditor’s review.
79 Under paragraph 78 of this Auditing Standard, the auditor needs to refuse to accept an engagement to review an interim financial report if the auditor’s preliminary knowledge of the engagement circumstances indicates that the auditor would be unable to complete the review because there will be a limitation on the scope of the auditor’s review imposed by management of the entity.
80 If, after accepting the engagement, management imposes a limitation on the scope of the review, the auditor shall request management to remove the limitation. If management refuses the auditor’s request to remove the limitation, the auditor shall communicate, in writing, to the appropriate level of management and those charged with governance, the reason(s) why the review cannot be completed.
81 If, after accepting the engagement, management imposes a limitation on the scope of the review, under paragraph 80 of this Auditing Standard, the auditor needs to request the removal of that limitation. If management refuses to do so, the auditor is unable to complete the review and express a conclusion. In such cases, under paragraph 80 of this Auditing Standard, the auditor needs to communicate, in writing, to the appropriate level of management and those charged with governance, the reason(s) why the review cannot be completed. Nevertheless, if a matter comes to the auditor’s attention that causes the auditor to believe that a material adjustment to the interim financial report is necessary for it to be prepared, in all material respects, in accordance with the applicable financial reporting framework, under paragraphs 62, 63 and 66 of this Auditing Standard, the auditor needs to communicate such matters to the appropriate level of management.
82 If management refuses the auditor’s request to remove a limitation that has been imposed on the scope of the review, but there is a legal or regulatory requirement for the auditor to issue a report, the auditor shall issue a disclaimer of conclusion or qualified conclusion report containing the reason(s) why the review cannot be completed.
83 Under paragraph 82 of this Auditing Standard, the auditor needs to consider the legal and regulatory responsibilities, including whether there is a legal requirement for the auditor to issue a report. If there is such a requirement, under paragraph 82 of this Auditing Standard, the auditor needs to disclaim a conclusion, and provide in the review report the reason why the review cannot be completed. However, if a matter comes to the auditor’s attention that causes the auditor to believe that a material adjustment to the interim financial report is necessary for it to be prepared, in all material respects, in accordance with the applicable financial reporting framework, under paragraph 84 of this Standard, the auditor needs to communicate such a matter in the report.