ASRE 2415 Review of a Financial Report - : Company Limited by Guarantee or an Entity Reporting under the ACNC Act or Other Applicable Legislation or Regulation
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The Auditing and Assurance Standards Board (AUASB) made Auditing Standard on Review Engagements ASRE 2415 Review of a Financial Report: Company Limited by Guarantee or an Entity Reporting under the ACNC Act or Other Applicable Legislation or Regulation, pursuant to section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001, on 30 June 2010.
This compiled version of ASRE 2415 incorporates subsequent amendments contained in other Auditing Standards made by the AUASB up to and including 13 December 2022 (see Compilation Details).
Auditing Standard on Review Engagements ASRE 2415
Review of a Financial Report: Company Limited by Guarantee or an Entity Reporting under the ACNC Act or Other Applicable Legislation or Regulation
Application
This Auditing Standard on Review Engagements applies to a review of a financial report for a financial year for:
a company limited by guarantee in accordance with the Corporations Act 2001 (the Act); or
an entity required to report under other applicable legislation or regulation.
Operative Date
This Auditing Standard on Review Engagements is operative for financial reporting periods ending on or after 30 June 2010. [Note: For operative dates of paragraphs changed or added by an Amending Standard, see Compilation Details.]
Introduction
Scope of this Auditing Standard on Review Engagements
This Auditing Standard on Review Engagements deals with the responsibilities of the auditor to review the financial report of:
A company limited by guarantee that has elected, under section 301(3) of the Act, to have its financial report reviewed instead of audited. It also deals with the form and content of the review report, which is based on the example review reports contained within existing review standards.[1]
An entity that has elected, under the ACNC Act, to have its financial report reviewed instead of audited.
An entity required to report under other applicable legislation or regulation.
Effective Date
This Auditing Standard on Review Engagements does not apply to the review of a half‑year financial report under the Act. Refer ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, as amended.
Objective
The objective of the auditor, is to plan and perform the review of a financial report prepared by a company limited by guarantee or an entity reporting under the ACNC Act or under other applicable legislation or regulation, to enable the auditor to express a conclusion whether, on the basis of the review, anything has come to the auditor’s attention that causes the auditor to believe that the financial report is not prepared, in all material respects, in accordance with the applicable financial reporting framework.
Definitions
For the purposes of this Auditing Standard on Review Engagements, the following terms have the meanings attributed below:
A company limited by guarantee means a company limited by guarantee whose obligations are set out in section 285A of the Act.
A registered company auditor includes an individual who meets the requirements of section 324BE of the Act.
Revised Legislation means Corporations Amendment (Corporate Reporting Reform) Act 2010.
The term “auditor” as used in this Auditing Standard on Review Engagements, refers to a registered company auditor or an individual:
taken to be a registered company auditor under section 324BE of the Act; and/or
permitted under the ACNC Act to conduct reviews of a financial report; and/or
permitted to conduct reviews of a financial report under other applicable legislation or regulation.
The term “financial report”, as used in this Auditing Standard on Review Engagements, refers to a financial report for a financial year. A financial report for a financial year may be for a period that is greater than or less than 12 months.
Requirements
Applicable Standards
Company or Entity Previously Audited
When a company limited by guarantee, or an entity reporting under the ACNC Act, or an entity reporting under other applicable legislation or regulation, elects to have its financial report reviewed instead of audited, an auditor who has conducted an audit of the previous financial report of the company or entity in accordance with the Australian Auditing Standards, shall, in the first financial reporting period under revised legislation, conduct the review in accordance with ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity as amended.[2] (Ref: Para. A1)
Company Not Previously Audited by the Auditor
When a company limited by guarantee, or an entity reporting under the ACNC Act, or an entity reporting under other applicable legislation or regulation, elects to have its financial report reviewed instead of audited, an auditor who has not conducted an audit of the previous financial report of the company or entity in accordance with the Australian Auditing Standards, shall conduct the review in accordance with ASRE 2400 Review of a Financial Report Performed by an Assurance Practitioner Who is Not the Auditor of the Entity.[3] (Ref: Para. A2)
General Principles
The auditor shall comply with relevant ethical requirements relating to the review of the financial report.[4] (Ref: Para. A3)
The auditor shall implement the firm’s policies or procedures applicable to the individual engagement.[5]
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Application and Other Explanatory Material
Applicable Standards
Company or Entity Previously Audited (Ref: Para. 9)
At the time of amendments to the Act there will be companies limited by guarantee and entities reporting under the ACNC Act, or other applicable legislation or regulation, that have been in existence for some time and will have appointed an auditor. Where that auditor has conducted an audit of the company’s or entity’s previous financial report, that auditor will have obtained an understanding of the company or entity and its environment, including the company’s or entity’s internal control, in accordance with the Australian Auditing Standards. Accordingly, the auditor conducting a review, does so in accordance with ASRE 2410.[6] ASRE 2410 is to be read in conjunction with ASA 101 Preamble to Australian Auditing Standards, as amended.
Company or Entity Not Previously Audited by the Auditor (Ref: Para. 10)
A company limited by guarantee, and entities reporting under the ACNC Act, or other applicable legislation or regulation, may engage an auditor, who has not conducted an audit of the company’s or entity’s previous financial report, to conduct a review of its financial report. In such cases, that auditor will not have recently obtained an understanding of the company or entity and its environment, including the company’s or entity’s internal control, through compliance with Australian Auditing Standards. Accordingly, that auditor conducts the review in accordance with ASRE 2400.[7] ASRE 2400 is to be read in conjunction with ASA 100 Preamble to AUASB Standards.
General Principles (Ref: Para. 11)
When complying with the fundamental ethical principles in accordance with ASRE 2400, an auditor with no previous engagement experience with the company or entity, pays particular attention to the principles of professional competence and due care.
Appendix 1
(Ref: Para. 3)
EXAMPLE AUDITOR’S REVIEW REPORT
The following example auditor’s review report is to be used as a guide only and will need to be adapted according to the review engagement requirements and circumstances. It is based on the example review reports contained in the Appendices of ASRE 2400 and ASRE 2410.
The example auditor’s review report is to be adapted as necessary for reviews under the ACNC Act or other applicable legislation or regulation.
Example 1: Financial report of a company limited by guarantee prepared under the Corporations Act 2001. The financial reporting framework is designed to achieve fair presentation.
EXAMPLE OF AN UNMODIFIED REVIEW REPORT
INDEPENDENT AUDITOR’S REVIEW REPORT
To the members of [name of company/entity]
Report on the Financial Report
We [I][8] have reviewed the accompanying financial report of [name of company/entity], which comprises the statement of financial position as at 30 June 20XX, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration.[9]
Directors’/Board of Management’s[10] Responsibility for the Financial Report
The directors/board of management of the company/entity are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001/ACNC Act[11] and for such internal control as the directors/board of management determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our [My] responsibility is to express a conclusion on the financial report based on our [my] review. We [I] conducted our [my] review in accordance with Auditing Standard on Review Engagements ASRE 2415 Review of a Financial Report: Company Limited by Guarantee or an Entity Reporting under the ACNC Act or Other Applicable Legislation or Regulation, in order to state whether, on the basis of the procedures described, we [I] have become aware of any matter that makes us [me] believe that the financial report is not in accordance with the Corporations Act 2001/ACNC Act[12] including: giving a true and fair view of the company’s/entity’s financial position as at 30 June 20XX and its performance for the year ended on that date; and complying with the Australian Accounting Standards [and Corporations Regulations 2001]. ASRE 2415 requires that we [I] comply with the ethical requirements relevant to the review of the financial report.
A review of a financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us [me] to obtain assurance that we [I] would become aware of all significant matters that might be identified in an audit. Accordingly, we [I] do not express an audit opinion.
[Independence
In conducting our [my] review, we [I] have complied with the independence requirements of the Corporations Act 2001. We [I] confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of [name of company], would be in the same terms if given to the directors as at the time of this auditor’s report.][13]
Based on our [my] review, which is not an audit, we [I] have not become aware of any matter that makes us [me] believe that the financial report of [name of company] is not in accordance with the Corporations Act 2001[15] including:
giving a true and fair view of the company’s financial position as at 30 June 20XX and of its performance for the year ended on that date; and
complying with Australian Accounting Standards [and Corporations Regulations 2001].
Report on Other Legal and Regulatory Requirements
[Form and content of this section of the review report will vary depending on the nature of the auditor’s other reporting responsibilities].
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