Obtaining a Copy of this Auditing Standa
Obtaining a Copy of this Auditing Standard
Obtaining a Copy of this Auditing Standard
This Auditing Standard is available on the Auditing and Assurance Standards Board (AUASB) website: www.auasb.gov.au
//
© 2026 Zoe. All rights reserved.
Zoe is a legal information platform. Always consult the Federal Register of Legislation for authoritative text.
Commonwealth legislation
This Act has been repealed and is no longer in force. It is retained for historical reference.
This standard sets rules for independent auditors performing reviews of interim or other financial reports instead of full audits. Reviews give limited assurance—mainly enquiries and analytical procedures—so investors and regulators know the work’s scope and limits. It requires auditor independence, written engagement terms, consideration of materiality and going-concern, reporting a conclusion (not an audit opinion), and communication of suspected fraud or legal breaches.
Want the full deep dive?
Zoe can write the in-depth analysis on top of the summary above: how it works, who it affects and what each part actually does.
Direct links to the current provisions in Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity (June 2020).
This Auditing Standard is available on the Auditing and Assurance Standards Board (AUASB) website: www.auasb.gov.au
| Auditing and Assurance Standards BoardPodium Level 14, 530 Collins StreetMelbourne Victoria 3000AUSTRALIA | Phone: (03) 8080 7400E‑mail: enquiries@auasb.gov.auPostal Address:PO Box 204, Collins Street WestMelbourne Victoria 8007AUSTRALIA |
|---|
© 2020 Commonwealth of Australia. The text, graphics and layout of this Auditing Standard are protected by Australian copyright law and the comparable law of other countries. Reproduction within Australia in unaltered form (retaining this notice) is permitted for personal and non‑commercial use subject to the inclusion of an acknowledgment of the source as being the Australian Auditing and Assurance Standards Board (AUASB).
Requests and enquiries concerning reproduction and rights for commercial purposes within Australia should be addressed to the Technical Director, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria 8007 or sent to enquiries@auasb.gov.au. Otherwise, no part of this Auditing Standard may be reproduced, stored or transmitted in any form or by any means without the prior written permission of the AUASB except as permitted by law.
This Auditing Standard reproduces substantial parts of the corresponding International Standard on Review Engagements issued by the International Auditing and Assurance Standards Board (IAASB) and published by the International Federation of Accountants (IFAC), in the manner described in the statement on Conformity with International Standards on Auditing. The AUASB acknowledges that IFAC is the owner of copyright in the International Standard on Review Engagements incorporated in this Auditing Standard throughout the world.
All existing rights in this material are reserved outside Australia. Reproduction outside Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use only.
Further information and requests for authorisation to reproduce this Auditing Standard for commercial purposes outside Australia should be addressed to the Technical Director, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria 8007 or sent to enquiries@auasb.gov.au. Any decision to approve a request may also require the agreement of IFAC.
ISSN 1833-4393
PREFACE
AUTHORITY STATEMENT
Paragraphs
Application.................................................................1
Operative Date..............................................................2
Introduction
Scope of this Auditing Standard on Review Engagements................................3
Objective..................................................................4
Definitions.................................................................5
Requirements
Performing a Review.........................................................6-7
General Principles of a Review of a Financial Report.................................8-10
Agreeing the Terms of the Engagement..........................................11-12
Procedures for a Review of a Financial Report.....................................13-14
Materiality.................................................................15
Enquiries, Analytical and Other Review Procedures.................................16-21
Comparatives – First Financial Report.............................................22
Evaluation of Misstatements....................................................23
Written Representations.....................................................24-25
Auditor’s Responsibility for Other Information....................................26-27
Communication...........................................................28-32
Reporting the Nature, Extent and Results of the Review of a Financial Report..............33-39
Departure from the Applicable Financial Reporting Framework........................40-41
Limitation on Scope..........................................................42
Limitation on Scope Imposed by Management.....................................43-47
Other Limitations on Scope Not Imposed by Management...............................48
Going Concern and Material Uncertainties.......................................49-51
Emphasis of Matter and Other Matter Paragraphs...................................52-54
Documentation..............................................................55
Application and Other Explanatory Material
Objective...............................................................A1-A3
Performing a Review.........................................................A4
General Principles of a Review of a Financial Report...............................A5-A7
Agreeing the Terms of the Engagement............................................A8
Procedures for a Review of a Financial Report...................................A9-A13
Materiality............................................................A14-A18
Enquiries, Analytical and Other Review Procedures..............................A19-A27
Comparatives – First Financial Report........................................A28-A31
Evaluation of Misstatements...............................................A32-A34
Written Representations......................................................A35
Auditor’s Responsibility for Other Information.................................A36-A38
Communication........................................................A39-A42
Reporting the Nature, Extent and Results of the Review of a Financial Report...........A43-A44
Departure from the Applicable Financial Reporting Framework......................A45-A46
Limitation on Scope.........................................................A47
Limitation on Scope Imposed by Management..................................A48-A50
Other Limitations on Scope Not Imposed by Management.........................A51-A52
Going Concern and a Material Uncertainty.....................................A53-A55
Emphasis of Matter Paragraphs.............................................A56-A57
Other Considerations....................................................A58-A63
Documentation............................................................A64
Appendix 1: Example of an Engagement Letter for a Review of a Financial Report
Example of a Representation Letter
Appendix 2: Analytical Procedures the Auditor May Consider When Performing a Review of a Financial Report
Illustrative Detailed Procedures that may be Performed in an Engagement to Review a Financial Report
Appendix 3: An Auditor’s Review Report under the Corporations Act 2001
Appendix 4: Example of an Unmodified Auditor’s Review Report on a Financial Report - Fair Presentation Framework
Example of an Auditor’s Review Report with a Qualified Conclusion (Except For) for a Departure from the Applicable Financial Reporting Framework – Fair Presentation Framework
Example of an Auditor’s Review Report with a Qualified Conclusion for a Limitation On Scope Not Imposed by Management -Fair Presentation Framework
Example of an Auditor’s Review Report with an Adverse Conclusion for a Departure from the Applicable Financial Reporting Framework -
Fair Presentation Framework
Example of an Unmodified Auditor’s Review Report on a Financial Report -
Compliance Framework
This Auditing Standard is available on the Auditing and Assurance Standards Board (AUASB) website: www.auasb.gov.au
| Auditing and Assurance Standards BoardPodium Level 14, 530 Collins StreetMelbourne Victoria 3000AUSTRALIA | Phone: (03) 8080 7400E‑mail: enquiries@auasb.gov.auPostal Address:PO Box 204, Collins Street WestMelbourne Victoria 8007AUSTRALIA |
|---|
© 2020 Commonwealth of Australia. The text, graphics and layout of this Auditing Standard are protected by Australian copyright law and the comparable law of other countries. Reproduction within Australia in unaltered form (retaining this notice) is permitted for personal and non‑commercial use subject to the inclusion of an acknowledgment of the source as being the Australian Auditing and Assurance Standards Board (AUASB).
Requests and enquiries concerning reproduction and rights for commercial purposes within Australia should be addressed to the Technical Director, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria 8007 or sent to enquiries@auasb.gov.au. Otherwise, no part of this Auditing Standard may be reproduced, stored or transmitted in any form or by any means without the prior written permission of the AUASB except as permitted by law.
This Auditing Standard reproduces substantial parts of the corresponding International Standard on Review Engagements issued by the International Auditing and Assurance Standards Board (IAASB) and published by the International Federation of Accountants (IFAC), in the manner described in the statement on Conformity with International Standards on Auditing. The AUASB acknowledges that IFAC is the owner of copyright in the International Standard on Review Engagements incorporated in this Auditing Standard throughout the world.
All existing rights in this material are reserved outside Australia. Reproduction outside Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use only.
Further information and requests for authorisation to reproduce this Auditing Standard for commercial purposes outside Australia should be addressed to the Technical Director, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria 8007 or sent to enquiries@auasb.gov.au. Any decision to approve a request may also require the agreement of IFAC.
ISSN 1833-4393
PREFACE
AUTHORITY STATEMENT
Paragraphs
Application.................................................................1
Operative Date..............................................................2
Introduction
Scope of this Auditing Standard on Review Engagements................................3
Objective..................................................................4
Definitions.................................................................5
Requirements
Performing a Review.........................................................6-7
General Principles of a Review of a Financial Report.................................8-10
Agreeing the Terms of the Engagement..........................................11-12
Procedures for a Review of a Financial Report.....................................13-14
Materiality.................................................................15
Enquiries, Analytical and Other Review Procedures.................................16-21
Comparatives – First Financial Report.............................................22
Evaluation of Misstatements....................................................23
Written Representations.....................................................24-25
Auditor’s Responsibility for Other Information....................................26-27
Communication...........................................................28-32
Reporting the Nature, Extent and Results of the Review of a Financial Report..............33-39
Departure from the Applicable Financial Reporting Framework........................40-41
Limitation on Scope..........................................................42
Limitation on Scope Imposed by Management.....................................43-47
Other Limitations on Scope Not Imposed by Management...............................48
Going Concern and Material Uncertainties.......................................49-51
Emphasis of Matter and Other Matter Paragraphs...................................52-54
Documentation..............................................................55
Application and Other Explanatory Material
Objective...............................................................A1-A3
Performing a Review.........................................................A4
General Principles of a Review of a Financial Report...............................A5-A7
Agreeing the Terms of the Engagement............................................A8
Procedures for a Review of a Financial Report...................................A9-A13
Materiality............................................................A14-A18
Enquiries, Analytical and Other Review Procedures..............................A19-A27
Comparatives – First Financial Report........................................A28-A31
Evaluation of Misstatements...............................................A32-A34
Written Representations......................................................A35
Auditor’s Responsibility for Other Information.................................A36-A38
Communication........................................................A39-A42
Reporting the Nature, Extent and Results of the Review of a Financial Report...........A43-A44
Departure from the Applicable Financial Reporting Framework......................A45-A46
Limitation on Scope.........................................................A47
Limitation on Scope Imposed by Management..................................A48-A50
Other Limitations on Scope Not Imposed by Management.........................A51-A52
Going Concern and a Material Uncertainty.....................................A53-A55
Emphasis of Matter Paragraphs.............................................A56-A57
Other Considerations....................................................A58-A63
Documentation............................................................A64
Appendix 1: Example of an Engagement Letter for a Review of a Financial Report
Example of a Representation Letter
Appendix 2: Analytical Procedures the Auditor May Consider When Performing a Review of a Financial Report
Illustrative Detailed Procedures that may be Performed in an Engagement to Review a Financial Report
Appendix 3: An Auditor’s Review Report under the Corporations Act 2001
Appendix 4: Example of an Unmodified Auditor’s Review Report on a Financial Report - Fair Presentation Framework
Example of an Auditor’s Review Report with a Qualified Conclusion (Except For) for a Departure from the Applicable Financial Reporting Framework – Fair Presentation Framework
Example of an Auditor’s Review Report with a Qualified Conclusion for a Limitation On Scope Not Imposed by Management -Fair Presentation Framework
Example of an Auditor’s Review Report with an Adverse Conclusion for a Departure from the Applicable Financial Reporting Framework -
Fair Presentation Framework
Example of an Unmodified Auditor’s Review Report on a Financial Report -
Compliance Framework
The AUASB issues Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity pursuant to the requirements of the legislative provisions and the Strategic Direction explained below.
The AUASB is a Non-corporate Commonwealth entity of the Australian Government established under section 227A of the Australian Securities and Investments Commission Act 2001, as amended (ASIC Act). Under section 336 of the Corporations Act 2001, the AUASB may make Auditing Standards for the purposes of the corporations legislation. These Auditing Standards are legislative instruments under the Legislation Act 2003.
Under the Strategic Direction given to the AUASB by the Financial Reporting Council (FRC), the AUASB is required, inter alia, to develop auditing standards that have a clear public interest focus and are of the highest quality.
This Auditing Standard on Review Engagements establishes requirements and provides application and other explanatory material regarding the responsibilities of an auditor of an entity when engaged to undertake a review of a financial report, and on the form and content of the auditor’s review report.
The Auditing and Assurance Standards Board (AUASB) makes this Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity (June 2020) pursuant to section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001.
This Auditing Standard on Review Engagements is to be read in conjunction with ASA 101 Preamble to Australian Auditing Standards, which sets out the intentions of the AUASB on how the Australian Auditing Standards, operative for financial reporting periods commencing on or after 1 January 2010, are to be understood, interpreted and applied.
Dated: 9 June 2020 R Simnett AO
Chair – AUASB
This Auditing Standard on Review Engagements conforms with International Standard on Review Engagements ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity, issued by the International Auditing and Assurance Standards Board (IAASB), an independent standard‑setting board of the International Federation of Accountants (IFAC).
In 2009 extant ASRE 2410 Review of Interim and Other Financial Reports Performed by the Independent Auditor of the Entity was reissued by the AUASB in clarity format. The underlying standard to extant ASRE 2410 is ISRE 2410 which has not been drafted in “clarity” format by the IAASB.
Additionally in 2009, following consultation with stakeholders in Australia in accordance with normal exposure draft processes, the AUASB decided that:
At the time of issuing extant ASRE 2410 the AUASB determined that it conformed, with the exceptions listed below, to ISRE 2410 to the extent that ISRE 2410 deals with the review of financial statements by the auditor of the entity.
In 2019, following consultation with stakeholders in Australia, further amendments to ASRE 2410 were made to align the reporting requirements with the revised auditor reporting requirements contained in ASA 700 Forming an Opinion and Reporting on a Financial Report (operative for financial reporting periods ending on or after 15 December 2016). These amendments are additional reporting requirements which are not contained in ISRE 2410.
The AUASB considers that this Auditing Standard conforms, to the extent described above, with International Standard ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the IAASB. Generally, when the text of an International Standard is modified by the AUASB as part of its due process, additional or modified paragraphs are identified through the use of an “Aus.” prefix. Due to the extensive number of additions and restricting of the standard, “Aus.” paragraphs have not been used to identify Australian additions or modifications. The main differences between this Auditing Standard and ISRE 2410 are:
a review, by the auditor of the entity, of a financial report for a half‑year in accordance with the Corporations Act 2001; and
a review, by the auditor of the entity, of a financial report, or a complete set of financial statements, comprising historical financial information, for any other purpose (Ref: Para. 1(a) and (b)).
Where in rare and exceptional circumstances, factors outside the auditor’s control prevent the auditor from complying with an essential procedure contained within a relevant requirement, the auditor shall:
if possible, perform appropriate alternative procedures; and
document in the working papers:
When the auditor is unable to perform appropriate alternative procedures, the auditor shall consider the implications for the auditor’s review report (Ref: Para. 7).
The auditor shall, prior to agreeing the terms of the engagement, determine whether the financial reporting framework is acceptable and obtain agreement from management and, where appropriate, those charged with governance, that it acknowledges and understands its responsibility:
for the preparation of the financial report including where relevant their fair presentation;
for such internal controls as management and, where appropriate, those charged with governance, deems necessary to enable the preparation of the financial report that is free from material misstatement; and
to provide the auditor with:
access to information relevant to the preparation of the financial report;
additional information that the auditor may request for the purposes of the review engagement; and
unrestricted access to persons from whom the auditor determines it necessary to obtain evidence (Ref: Para. 11).
The auditor shall agree the terms of the engagement with the entity, which shall be recorded in writing by the auditor and forwarded to the entity. When the review engagement is undertaken pursuant to legislation, the minimum applicable terms are those contained in the legislation (Ref: Para. 12).
The auditor shall consider materiality, using professional judgement, when:
determining the nature, timing and extent of review procedures; and
evaluating the effect of misstatements (Ref: Para. 15).
When comparative information is included for the first time in a financial report, an auditor shall perform similar procedures on the comparative information as applied to the current period financial report (Ref: Para. 22).
If management and, where appropriate, those charged with governance refuse to provide a written representation that the auditor considers necessary, this constitutes a limitation of the scope of the auditor’s work and the auditor shall express a qualified conclusion or a disclaimer of conclusion, as appropriate (Ref: Para. 25).
When, as a result of performing the review of a financial report, a matter comes to the auditor’s attention that indicates the existence of fraud or non‑compliance with laws and regulations or suspected fraud or non-compliance with laws and regulations, has occurred in the entity, the auditor shall:
communicate the matter unless prohibited by law or regulation, as soon as practicable to those charged with governance and shall consider the implications for the review
request management’s assessment of the effect (s) on the financial report;
consider the effect on the auditor’s conclusion and the review report; and
determine whether law, regulation or relevant ethical requirements:
o require the auditor to report to an appropriate authority outside the entity;
o establish responsibilities under which reporting to an appropriate authority outside the entity may be appropriate in the circumstances. (Ref: Para. 31).
The following paragraphs contain requirements in relation to the auditor’s review report and are in addition to those in ISRE 2410:
Paragraphs 33 to 39 relate to the content and order of the auditor’s review report;
Paragraphs 40, 41, 48 and 50 relate to auditor’s review reports which contain a modified review conclusion;
Paragraphs 49 to 51 relate to auditor’s review reports with a going concern matter;
Paragraphs 53 and 54 relate to emphasis of matter and other matter paragraphs.
Compliance with this Auditing Standard on Review Engagements enables compliance with ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity to the extent described above.
The AUASB issues Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity pursuant to the requirements of the legislative provisions and the Strategic Direction explained below.
The AUASB is a Non-corporate Commonwealth entity of the Australian Government established under section 227A of the Australian Securities and Investments Commission Act 2001, as amended (ASIC Act). Under section 336 of the Corporations Act 2001, the AUASB may make Auditing Standards for the purposes of the corporations legislation. These Auditing Standards are legislative instruments under the Legislation Act 2003.
Under the Strategic Direction given to the AUASB by the Financial Reporting Council (FRC), the AUASB is required, inter alia, to develop auditing standards that have a clear public interest focus and are of the highest quality.
This Auditing Standard on Review Engagements establishes requirements and provides application and other explanatory material regarding the responsibilities of an auditor of an entity when engaged to undertake a review of a financial report, and on the form and content of the auditor’s review report.
The Auditing and Assurance Standards Board (AUASB) makes this Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity (June 2020) pursuant to section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001.
This Auditing Standard on Review Engagements is to be read in conjunction with ASA 101 Preamble to Australian Auditing Standards, which sets out the intentions of the AUASB on how the Australian Auditing Standards, operative for financial reporting periods commencing on or after 1 January 2010, are to be understood, interpreted and applied.
Dated: 9 June 2020 R Simnett AO
Chair – AUASB
This Auditing Standard on Review Engagements conforms with International Standard on Review Engagements ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity, issued by the International Auditing and Assurance Standards Board (IAASB), an independent standard‑setting board of the International Federation of Accountants (IFAC).
In 2009 extant ASRE 2410 Review of Interim and Other Financial Reports Performed by the Independent Auditor of the Entity was reissued by the AUASB in clarity format. The underlying standard to extant ASRE 2410 is ISRE 2410 which has not been drafted in “clarity” format by the IAASB.
Additionally in 2009, following consultation with stakeholders in Australia in accordance with normal exposure draft processes, the AUASB decided that:
At the time of issuing extant ASRE 2410 the AUASB determined that it conformed, with the exceptions listed below, to ISRE 2410 to the extent that ISRE 2410 deals with the review of financial statements by the auditor of the entity.
In 2019, following consultation with stakeholders in Australia, further amendments to ASRE 2410 were made to align the reporting requirements with the revised auditor reporting requirements contained in ASA 700 Forming an Opinion and Reporting on a Financial Report (operative for financial reporting periods ending on or after 15 December 2016). These amendments are additional reporting requirements which are not contained in ISRE 2410.
The AUASB considers that this Auditing Standard conforms, to the extent described above, with International Standard ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the IAASB. Generally, when the text of an International Standard is modified by the AUASB as part of its due process, additional or modified paragraphs are identified through the use of an “Aus.” prefix. Due to the extensive number of additions and restricting of the standard, “Aus.” paragraphs have not been used to identify Australian additions or modifications. The main differences between this Auditing Standard and ISRE 2410 are:
a review, by the auditor of the entity, of a financial report for a half‑year in accordance with the Corporations Act 2001; and
a review, by the auditor of the entity, of a financial report, or a complete set of financial statements, comprising historical financial information, for any other purpose (Ref: Para. 1(a) and (b)).
Where in rare and exceptional circumstances, factors outside the auditor’s control prevent the auditor from complying with an essential procedure contained within a relevant requirement, the auditor shall:
if possible, perform appropriate alternative procedures; and
document in the working papers:
When the auditor is unable to perform appropriate alternative procedures, the auditor shall consider the implications for the auditor’s review report (Ref: Para. 7).
The auditor shall, prior to agreeing the terms of the engagement, determine whether the financial reporting framework is acceptable and obtain agreement from management and, where appropriate, those charged with governance, that it acknowledges and understands its responsibility:
for the preparation of the financial report including where relevant their fair presentation;
for such internal controls as management and, where appropriate, those charged with governance, deems necessary to enable the preparation of the financial report that is free from material misstatement; and
to provide the auditor with:
access to information relevant to the preparation of the financial report;
additional information that the auditor may request for the purposes of the review engagement; and
unrestricted access to persons from whom the auditor determines it necessary to obtain evidence (Ref: Para. 11).
The auditor shall agree the terms of the engagement with the entity, which shall be recorded in writing by the auditor and forwarded to the entity. When the review engagement is undertaken pursuant to legislation, the minimum applicable terms are those contained in the legislation (Ref: Para. 12).
The auditor shall consider materiality, using professional judgement, when:
determining the nature, timing and extent of review procedures; and
evaluating the effect of misstatements (Ref: Para. 15).
When comparative information is included for the first time in a financial report, an auditor shall perform similar procedures on the comparative information as applied to the current period financial report (Ref: Para. 22).
If management and, where appropriate, those charged with governance refuse to provide a written representation that the auditor considers necessary, this constitutes a limitation of the scope of the auditor’s work and the auditor shall express a qualified conclusion or a disclaimer of conclusion, as appropriate (Ref: Para. 25).
When, as a result of performing the review of a financial report, a matter comes to the auditor’s attention that indicates the existence of fraud or non‑compliance with laws and regulations or suspected fraud or non-compliance with laws and regulations, has occurred in the entity, the auditor shall:
communicate the matter unless prohibited by law or regulation, as soon as practicable to those charged with governance and shall consider the implications for the review
request management’s assessment of the effect (s) on the financial report;
consider the effect on the auditor’s conclusion and the review report; and
determine whether law, regulation or relevant ethical requirements:
o require the auditor to report to an appropriate authority outside the entity;
o establish responsibilities under which reporting to an appropriate authority outside the entity may be appropriate in the circumstances. (Ref: Para. 31).
The following paragraphs contain requirements in relation to the auditor’s review report and are in addition to those in ISRE 2410:
Paragraphs 33 to 39 relate to the content and order of the auditor’s review report;
Paragraphs 40, 41, 48 and 50 relate to auditor’s review reports which contain a modified review conclusion;
Paragraphs 49 to 51 relate to auditor’s review reports with a going concern matter;
Paragraphs 53 and 54 relate to emphasis of matter and other matter paragraphs.
Compliance with this Auditing Standard on Review Engagements enables compliance with ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity to the extent described above.
The Auditing and Assurance Standards Board (AUASB) makes this Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity (June 2020) pursuant to section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001.
This Auditing Standard on Review Engagements is to be read in conjunction with ASA 101 Preamble to Australian Auditing Standards, which sets out the intentions of the AUASB on how the Australian Auditing Standards, operative for financial reporting periods commencing on or after 1 January 2010, are to be understood, interpreted and applied.
This Auditing Standard on Review Engagements conforms with International Standard on Review Engagements ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity, issued by the International Auditing and Assurance Standards Board (IAASB), an independent standard‑setting board of the International Federation of Accountants (IFAC).
In 2009 extant ASRE 2410 Review of Interim and Other Financial Reports Performed by the Independent Auditor of the Entity was reissued by the AUASB in clarity format. The underlying standard to extant ASRE 2410 is ISRE 2410 which has not been drafted in “clarity” format by the IAASB.
Additionally in 2009, following consultation with stakeholders in Australia in accordance with normal exposure draft processes, the AUASB decided that:
At the time of issuing extant ASRE 2410 the AUASB determined that it conformed, with the exceptions listed below, to ISRE 2410 to the extent that ISRE 2410 deals with the review of financial statements by the auditor of the entity.
In 2019, following consultation with stakeholders in Australia, further amendments to ASRE 2410 were made to align the reporting requirements with the revised auditor reporting requirements contained in ASA 700 Forming an Opinion and Reporting on a Financial Report (operative for financial reporting periods ending on or after 15 December 2016). These amendments are additional reporting requirements which are not contained in ISRE 2410.
The AUASB considers that this Auditing Standard conforms, to the extent described above, with International Standard ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the IAASB. Generally, when the text of an International Standard is modified by the AUASB as part of its due process, additional or modified paragraphs are identified through the use of an “Aus.” prefix. Due to the extensive number of additions and restricting of the standard, “Aus.” paragraphs have not been used to identify Australian additions or modifications. The main differences between this Auditing Standard and ISRE 2410 are:
a review, by the auditor of the entity, of a financial report for a half‑year in accordance with the Corporations Act 2001; and
a review, by the auditor of the entity, of a financial report, or a complete set of financial statements, comprising historical financial information, for any other purpose (Ref: Para. 1(a) and (b)).
Where in rare and exceptional circumstances, factors outside the auditor’s control prevent the auditor from complying with an essential procedure contained within a relevant requirement, the auditor shall:
if possible, perform appropriate alternative procedures; and
document in the working papers:
When the auditor is unable to perform appropriate alternative procedures, the auditor shall consider the implications for the auditor’s review report (Ref: Para. 7).
The auditor shall, prior to agreeing the terms of the engagement, determine whether the financial reporting framework is acceptable and obtain agreement from management and, where appropriate, those charged with governance, that it acknowledges and understands its responsibility:
for the preparation of the financial report including where relevant their fair presentation;
for such internal controls as management and, where appropriate, those charged with governance, deems necessary to enable the preparation of the financial report that is free from material misstatement; and
to provide the auditor with:
access to information relevant to the preparation of the financial report;
additional information that the auditor may request for the purposes of the review engagement; and
unrestricted access to persons from whom the auditor determines it necessary to obtain evidence (Ref: Para. 11).
The auditor shall agree the terms of the engagement with the entity, which shall be recorded in writing by the auditor and forwarded to the entity. When the review engagement is undertaken pursuant to legislation, the minimum applicable terms are those contained in the legislation (Ref: Para. 12).
The auditor shall consider materiality, using professional judgement, when:
determining the nature, timing and extent of review procedures; and
evaluating the effect of misstatements (Ref: Para. 15).
When comparative information is included for the first time in a financial report, an auditor shall perform similar procedures on the comparative information as applied to the current period financial report (Ref: Para. 22).
If management and, where appropriate, those charged with governance refuse to provide a written representation that the auditor considers necessary, this constitutes a limitation of the scope of the auditor’s work and the auditor shall express a qualified conclusion or a disclaimer of conclusion, as appropriate (Ref: Para. 25).
When, as a result of performing the review of a financial report, a matter comes to the auditor’s attention that indicates the existence of fraud or non‑compliance with laws and regulations or suspected fraud or non-compliance with laws and regulations, has occurred in the entity, the auditor shall:
communicate the matter unless prohibited by law or regulation, as soon as practicable to those charged with governance and shall consider the implications for the review
request management’s assessment of the effect (s) on the financial report;
consider the effect on the auditor’s conclusion and the review report; and
determine whether law, regulation or relevant ethical requirements:
o require the auditor to report to an appropriate authority outside the entity;
o establish responsibilities under which reporting to an appropriate authority outside the entity may be appropriate in the circumstances. (Ref: Para. 31).
The following paragraphs contain requirements in relation to the auditor’s review report and are in addition to those in ISRE 2410:
Paragraphs 33 to 39 relate to the content and order of the auditor’s review report;
Paragraphs 40, 41, 48 and 50 relate to auditor’s review reports which contain a modified review conclusion;
Paragraphs 49 to 51 relate to auditor’s review reports with a going concern matter;
Paragraphs 53 and 54 relate to emphasis of matter and other matter paragraphs.
Compliance with this Auditing Standard on Review Engagements enables compliance with ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity to the extent described above.
The term “fair presentation framework” is used to refer to a financial reporting framework that requires compliance with the requirements of the framework and;
The term “compliance framework” is used to refer to a financial reporting framework that requires compliance with the requirements of the framework, but does not contain the acknowledgements in (i) or (ii) above.
When the auditor is unable to perform appropriate alternative procedures, the auditor shall consider the implications for the auditor’s review report.
Preconditions for a Review
Agreement on Review Engagement Terms
Understanding the Entity and its Environment, Including its Internal Control
Use of going concern basis of accounting is appropriate
Use of going concern basis of accounting is inappropriate
* * *
Although other Auditing Standards do not apply to review engagements, they include guidance which may be helpful to auditors performing reviews covered by this Auditing Standard.
An illustrative engagement letter is set out in Appendix 1. The terms of engagement to review a financial report can also be combined with the terms of engagement to audit the annual financial report. ASA 210 includes guidance which may be helpful. (Ref: Para. 12)
Understanding the Entity and its Environment, Including its Internal Control
Considerations Specific to Public Sector Entities
Appendix 1
(Ref: Para. A8)
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:[9]]
Scope
You have requested that we review the half‑year financial report[10] 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[11] period ended on that date, and notes comprising 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 with the objective of providing us with a basis for reporting whether we have become aware of any matter that makes us believe that the half‑year financial report does not comply with the Corporations Act 2001, including giving a true and fair view of the financial position and its performance, and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulation 2001.[12] 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[13] as follows:
[Include text of sample auditor’s review report - see Appendix 3 or 4 as appropriate.]
The directors [those charged with governance[14]] 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.
The directors [those charged with governance] of the [company/registered scheme/disclosing entity] acknowledge and understand they have responsibility to provide us with:
A review of the half‑year financial report does not provide assurance that we shall become aware of all significant matters that might be identified in an audit. Further, our engagement cannot be relied upon to disclose whether fraud or errors, or illegal acts exist. However, we shall inform you of any material matters that come to our attention.
Independence
We confirm that, to the best of our knowledge and belief, we currently meet the independence requirements of the Corporations Act 2001 and the Accounting Professional and Ethics Standard Board APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (The Code) in relation to the review of the half‑year financial report. In conducting our review of the half‑year financial report, should we become aware that we have contravened the independence requirements of the Corporations Act 2001, we shall notify you on a timely basis. As part of our review process, we shall also provide you with a written independence declaration as required by the Corporations Act 2001.
The Corporations Act 2001 includes specific restrictions on the employment relationships that can exist between the reviewed entity and its auditors. To assist us in meeting the independence requirements of the Corporations Act 2001, and to the extent permitted by law and regulation, we request you discuss with us:
Presentation of the reviewed half‑year financial report in electronic format
It is our understanding that [the entity] intends to publish a hard copy of the reviewed half‑year financial report and the auditor’s review report for members, and to electronically present the reviewed half‑year financial report and the auditor’s review report on its internet web site. When information is presented electronically on a web site, the security and controls over information on the web site should be addressed by [the entity] to maintain the integrity of the data presented. The examination of the controls over the electronic presentation of reviewed financial information on the entity’s web site is beyond the scope of the review of the half‑year financial report. Responsibility for the electronic presentation of the half‑year financial report on the entity’s web site is that of the [governing body of the entity].
Fees
[Insert additional information here regarding fee arrangements and billings, as appropriate.]
We look forward to full co‑operation with your staff and we trust that they will make available to us whatever records, documentation and other information are requested in connection with our review.
[This letter will be effective for future years unless it is terminated, amended or superseded.[15]]
Please sign and return the attached copy of this letter to indicate that it is in accordance with your understanding of the arrangements for our review of the half‑year financial report.
Yours faithfully,
(signed)
……………………….
Name and Title
Date
Acknowledged on behalf of [entity] by
(signed)
……………………….
Name and Title
Date
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. Refer to paragraph 24 of this Auditing Standard for required representations.
Representations by management will vary from one entity to another and from one period to the next. Representation letters are ordinarily useful where evidence, other than that obtained by enquiry, may not be reasonably expected to be available or when management have made oral representations which the auditor wishes to confirm in writing.
[Entity Letterhead]
[Addressee – Auditor]
[Date]
This representation letter is provided in connection with your review of the half‑year[16] financial report[17] of [name of entity] for the [period] ended [date], for the purpose of you expressing a conclusion as to whether you became aware of any matter in the course of the review that makes you believe that the half‑year financial report does not comply with the Corporations Act 2001.
We acknowledge our responsibility for ensuring that the half‑year financial report complies with the Corporations Act 2001, including:
We confirm that the half‑year financial report is prepared and presented in accordance with the Corporations Act 2001 and is free of material misstatements, including omissions.
OR
[This representation letter is provided in connection with your review of the financial report[18] of [name of entity] for the [period] ended [date], for the purpose of you expressing a conclusion as to whether anything has come to your attention that causes you to believe that the financial report does present fairly, in all material respects[19], in accordance with [the applicable financial reporting framework[20]].
We acknowledge our responsibility for ensuring that the financial report is in accordance with [applicable financial reporting framework].
We confirm that the financial report is prepared and presented fairly in accordance with [applicable financial reporting framework] and is free of material misstatements, including omissions].
We confirm, to the best of our knowledge and belief, the following representations made to you during your review.
[Include representations required by this Auditing Standard (paragraph 24) and those relevant to the entity. Such representations may include the following examples.]
We have made available to you:
We have disclosed to you the results of our assessment of the risk that the [financial report] may be materially misstated as a result of fraud.
There:
We are responsible for an adequate internal control structure to prevent and detect fraud and error and to facilitate the preparation of a reliable financial report, and adequate financial records have been maintained. There are no material transactions that have not been recorded properly in the accounting records underlying the financial report.
We have no plans or intentions that may affect materially the carrying values, or classification, of assets and liabilities.
We have considered the requirements of Accounting Standard AASB 136 Impairment of Assets, when assessing the impairment of assets and in ensuring that no assets are stated in excess of their recoverable amount.
We believe the effects of uncorrected misstatements summarised in the accompanying schedule are immaterial, both individually and in the aggregate, to the [half‑year] financial report taken as a whole.
The following have been recorded and/or disclosed properly in the [half‑year] financial report:
We have disclosed to you all known instances of non-compliance or suspected non-compliance with laws and regulations whose effects should be considered when preparing the financial report.
The entity has satisfactory title to all assets, and there are no liens or encumbrances on such assets that have not been disclosed nor has any asset been pledged as collateral. Allowances for depreciation have been adjusted for all important items of property, plant and equipment that have been abandoned or are otherwise unusable.
The entity has complied with all aspects of contractual agreements that would have a material effect on the financial report in the event of non‑compliance.
There were no material commitments for construction or acquisition of property, plant and equipment or to acquire other non‑current assets, such as investments or intangibles, other than those disclosed in the financial report.
We have no plans to abandon lines of product or other plans or intentions that will result in any excess or obsolete inventory, and no inventory is stated at an amount in excess of net realisable value.
No events have occurred subsequent to the balance sheet date through to the date of this letter that would require adjustment to, or disclosure in, the [financial report].
We understand that your examination was made in accordance with Auditing Standard on Review Engagements ASRE 2410 and was, therefore, designed primarily for the purpose of expressing a conclusion on the financial report of [the entity], and that your procedures were limited to those which you considered necessary for that purpose.
Yours faithfully
[Name of signing officer and title]
Notes:
[The above example representation letter may need to be amended in certain circumstances. The following illustrate some of those situations.]
Exceptions
Where matters are disclosed in the financial report, the associated representation needs to be amended, for example:
“Except as discussed in Note X to the financial report, no events have occurred .….”
“The entity has no plans or intentions that may materially affect the carrying value or classification of assets and liabilities, except for our plan to dispose of segment X, as disclosed in note Y in the financial report, which is discussed in the minutes of the meeting of the governing body[21] held on [date]”.
Other Required Information
Certain entities may be required to include other information in the financial report, for example, performance indicators for government entities. In addition to identifying this information and the applicable financial reporting framework in paragraphs 1 and 2 of the example management representation letter, an additional paragraph similar to the following may be appropriate:
“The disclosures of key performance indicators have been prepared and presented in conformity with [relevant statutory requirements] and we consider the indicators reported to be relevant to the stated objectives of the [entity]”.
Management’s Opinions and Representation in the Notes to the Financial Statements
Where the notes to the financial statements include opinions and representations by management, such matters may be addressed in the representation letter. For example, notes relating to the anticipated outcome of litigation, the intent and ability to hold long‑term securities to maturity and plans necessary to support the going concern basis.
Environmental Matters
In situations where there are environmental matters that may, but probably will not, require an outflow of resources, this may be reflected in an addition to Item 9 (above), for example:
“However, the [entity] has received a notice from the Environmental Protection Agency that it may be required to share in the cost of clean-up of the [name] waste disposal site. This matter has been disclosed in Note A in the financial report and we believe that the disclosure and estimated contingent loss is reasonable based on available information.”
Compliance
If, as part of the review, the auditor is required also to report on the entity’s compliance with laws and regulations, a representation may be appropriate acknowledging that management is responsible for the entity’s compliance with applicable laws and regulations and that the requirements have been met. For example, for reviews under the Corporations Act 2001, the following paragraph may be added:
“The financial records of the [company, registered scheme or disclosing entity] have been kept so as to be sufficient to enable a financial report to be prepared and reviewed, and other records and registers required by the Corporations Act 2001 have been kept properly and are up‑to‑date.
Other Matters
Additional representations that may be appropriate in specific situations may include the following:
Appendix 2
(Ref: Para. A20)
ANALYTICAL PROCEDURES THE AUDITOR MAY CONSIDER WHEN PERFORMING A REVIEW OF A FINANCIAL REPORT
The analytical procedures carried out in a review of a financial report are determined by the auditor’s judgement. The procedures listed below are for illustrative purposes only. It is not intended that all the procedures suggested apply to every review engagement. This Appendix is not intended to serve as a program or checklist in the conduct of a review.
Examples of analytical procedures the auditor may consider when performing a review of a financial report include the following:
Comparing the financial report with the financial report of the immediately preceding period, with the financial report of the corresponding period of the preceding financial year, with the financial report that was expected by management for the current period, and with the most recent audited annual financial report.
Comparing the current financial report with anticipated results, such as budgets or forecasts. For example, comparing sources of revenue and the and the cost of sales in the current financial report with corresponding information in:
Comparing the current financial report with relevant non‑financial information.
Comparing the recorded amounts, or ratios developed from recorded amounts, to expectations developed by the auditor. The auditor develops such expectations by identifying and applying relationships that reasonably are expected to exist based on the auditor’s understanding of the entity and of the industry in which the entity operates.
Comparing ratios and indicators for the current period with those of entities in the same industry.
Comparing relationships among elements in the current financial report with corresponding relationships in the financial report of prior periods, for example, expense by type as a percentage of sales, assets by type as a percentage of total assets, and percentage of change in sales to percentage of change in receivables.
Comparing disaggregated data. The following are examples of how data may be disaggregated:
Sourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.
This Auditing Standard is available on the Auditing and Assurance Standards Board (AUASB) website: www.auasb.gov.au
| Auditing and Assurance Standards BoardPodium Level 14, 530 Collins StreetMelbourne Victoria 3000AUSTRALIA | Phone: (03) 8080 7400E‑mail: enquiries@auasb.gov.auPostal Address:PO Box 204, Collins Street WestMelbourne Victoria 8007AUSTRALIA |
|---|
© 2020 Commonwealth of Australia. The text, graphics and layout of this Auditing Standard are protected by Australian copyright law and the comparable law of other countries. Reproduction within Australia in unaltered form (retaining this notice) is permitted for personal and non‑commercial use subject to the inclusion of an acknowledgment of the source as being the Australian Auditing and Assurance Standards Board (AUASB).
Requests and enquiries concerning reproduction and rights for commercial purposes within Australia should be addressed to the Technical Director, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria 8007 or sent to enquiries@auasb.gov.au. Otherwise, no part of this Auditing Standard may be reproduced, stored or transmitted in any form or by any means without the prior written permission of the AUASB except as permitted by law.
This Auditing Standard reproduces substantial parts of the corresponding International Standard on Review Engagements issued by the International Auditing and Assurance Standards Board (IAASB) and published by the International Federation of Accountants (IFAC), in the manner described in the statement on Conformity with International Standards on Auditing. The AUASB acknowledges that IFAC is the owner of copyright in the International Standard on Review Engagements incorporated in this Auditing Standard throughout the world.
All existing rights in this material are reserved outside Australia. Reproduction outside Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use only.
Further information and requests for authorisation to reproduce this Auditing Standard for commercial purposes outside Australia should be addressed to the Technical Director, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria 8007 or sent to . Any decision to approve a request may also require the agreement of IFAC.
ISSN 1833-4393
PREFACE
AUTHORITY STATEMENT
Paragraphs
Application.................................................................1
Operative Date..............................................................2
Introduction
Scope of this Auditing Standard on Review Engagements................................3
Objective..................................................................4
Definitions.................................................................5
Requirements
Performing a Review.........................................................6-7
General Principles of a Review of a Financial Report.................................8-10
Agreeing the Terms of the Engagement..........................................11-12
Procedures for a Review of a Financial Report.....................................13-14
Materiality.................................................................15
Enquiries, Analytical and Other Review Procedures.................................16-21
Comparatives – First Financial Report.............................................22
Evaluation of Misstatements....................................................23
Written Representations.....................................................24-25
Auditor’s Responsibility for Other Information....................................26-27
Communication...........................................................28-32
Reporting the Nature, Extent and Results of the Review of a Financial Report..............33-39
Departure from the Applicable Financial Reporting Framework........................40-41
Limitation on Scope..........................................................42
Limitation on Scope Imposed by Management.....................................43-47
Other Limitations on Scope Not Imposed by Management...............................48
Going Concern and Material Uncertainties.......................................49-51
Emphasis of Matter and Other Matter Paragraphs...................................52-54
Documentation..............................................................55
Application and Other Explanatory Material
Objective...............................................................A1-A3
Performing a Review.........................................................A4
General Principles of a Review of a Financial Report...............................A5-A7
Agreeing the Terms of the Engagement............................................A8
Procedures for a Review of a Financial Report...................................A9-A13
Materiality............................................................A14-A18
Enquiries, Analytical and Other Review Procedures..............................A19-A27
Comparatives – First Financial Report........................................A28-A31
Evaluation of Misstatements...............................................A32-A34
Written Representations......................................................A35
Auditor’s Responsibility for Other Information.................................A36-A38
Communication........................................................A39-A42
Reporting the Nature, Extent and Results of the Review of a Financial Report...........A43-A44
Departure from the Applicable Financial Reporting Framework......................A45-A46
Limitation on Scope.........................................................A47
Limitation on Scope Imposed by Management..................................A48-A50
Other Limitations on Scope Not Imposed by Management.........................A51-A52
Going Concern and a Material Uncertainty.....................................A53-A55
Emphasis of Matter Paragraphs.............................................A56-A57
Other Considerations....................................................A58-A63
Documentation............................................................A64
Appendix 1: Example of an Engagement Letter for a Review of a Financial Report
Example of a Representation Letter
Appendix 2: Analytical Procedures the Auditor May Consider When Performing a Review of a Financial Report
Illustrative Detailed Procedures that may be Performed in an Engagement to Review a Financial Report
Appendix 3: An Auditor’s Review Report under the Corporations Act 2001
Appendix 4: Example of an Unmodified Auditor’s Review Report on a Financial Report - Fair Presentation Framework
Example of an Auditor’s Review Report with a Qualified Conclusion (Except For) for a Departure from the Applicable Financial Reporting Framework – Fair Presentation Framework
Example of an Auditor’s Review Report with a Qualified Conclusion for a Limitation On Scope Not Imposed by Management -Fair Presentation Framework
Example of an Auditor’s Review Report with an Adverse Conclusion for a Departure from the Applicable Financial Reporting Framework -
Fair Presentation Framework
Example of an Unmodified Auditor’s Review Report on a Financial Report -
Compliance Framework
This Auditing Standard is available on the Auditing and Assurance Standards Board (AUASB) website: www.auasb.gov.au
| Auditing and Assurance Standards BoardPodium Level 14, 530 Collins StreetMelbourne Victoria 3000AUSTRALIA | Phone: (03) 8080 7400E‑mail: enquiries@auasb.gov.auPostal Address:PO Box 204, Collins Street WestMelbourne Victoria 8007AUSTRALIA |
|---|
© 2020 Commonwealth of Australia. The text, graphics and layout of this Auditing Standard are protected by Australian copyright law and the comparable law of other countries. Reproduction within Australia in unaltered form (retaining this notice) is permitted for personal and non‑commercial use subject to the inclusion of an acknowledgment of the source as being the Australian Auditing and Assurance Standards Board (AUASB).
Requests and enquiries concerning reproduction and rights for commercial purposes within Australia should be addressed to the Technical Director, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria 8007 or sent to enquiries@auasb.gov.au. Otherwise, no part of this Auditing Standard may be reproduced, stored or transmitted in any form or by any means without the prior written permission of the AUASB except as permitted by law.
This Auditing Standard reproduces substantial parts of the corresponding International Standard on Review Engagements issued by the International Auditing and Assurance Standards Board (IAASB) and published by the International Federation of Accountants (IFAC), in the manner described in the statement on Conformity with International Standards on Auditing. The AUASB acknowledges that IFAC is the owner of copyright in the International Standard on Review Engagements incorporated in this Auditing Standard throughout the world.
All existing rights in this material are reserved outside Australia. Reproduction outside Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use only.
Further information and requests for authorisation to reproduce this Auditing Standard for commercial purposes outside Australia should be addressed to the Technical Director, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria 8007 or sent to enquiries@auasb.gov.au. Any decision to approve a request may also require the agreement of IFAC.
ISSN 1833-4393
PREFACE
AUTHORITY STATEMENT
Paragraphs
Application.................................................................1
Operative Date..............................................................2
Introduction
Scope of this Auditing Standard on Review Engagements................................3
Objective..................................................................4
Definitions.................................................................5
Requirements
Performing a Review.........................................................6-7
General Principles of a Review of a Financial Report.................................8-10
Agreeing the Terms of the Engagement..........................................11-12
Procedures for a Review of a Financial Report.....................................13-14
Materiality.................................................................15
Enquiries, Analytical and Other Review Procedures.................................16-21
Comparatives – First Financial Report.............................................22
Evaluation of Misstatements....................................................23
Written Representations.....................................................24-25
Auditor’s Responsibility for Other Information....................................26-27
Communication...........................................................28-32
Reporting the Nature, Extent and Results of the Review of a Financial Report..............33-39
Departure from the Applicable Financial Reporting Framework........................40-41
Limitation on Scope..........................................................42
Limitation on Scope Imposed by Management.....................................43-47
Other Limitations on Scope Not Imposed by Management...............................48
Going Concern and Material Uncertainties.......................................49-51
Emphasis of Matter and Other Matter Paragraphs...................................52-54
Documentation..............................................................55
Application and Other Explanatory Material
Objective...............................................................A1-A3
Performing a Review.........................................................A4
General Principles of a Review of a Financial Report...............................A5-A7
Agreeing the Terms of the Engagement............................................A8
Procedures for a Review of a Financial Report...................................A9-A13
Materiality............................................................A14-A18
Enquiries, Analytical and Other Review Procedures..............................A19-A27
Comparatives – First Financial Report........................................A28-A31
Evaluation of Misstatements...............................................A32-A34
Written Representations......................................................A35
Auditor’s Responsibility for Other Information.................................A36-A38
Communication........................................................A39-A42
Reporting the Nature, Extent and Results of the Review of a Financial Report...........A43-A44
Departure from the Applicable Financial Reporting Framework......................A45-A46
Limitation on Scope.........................................................A47
Limitation on Scope Imposed by Management..................................A48-A50
Other Limitations on Scope Not Imposed by Management.........................A51-A52
Going Concern and a Material Uncertainty.....................................A53-A55
Emphasis of Matter Paragraphs.............................................A56-A57
Other Considerations....................................................A58-A63
Documentation............................................................A64
Appendix 1: Example of an Engagement Letter for a Review of a Financial Report
Example of a Representation Letter
Appendix 2: Analytical Procedures the Auditor May Consider When Performing a Review of a Financial Report
Illustrative Detailed Procedures that may be Performed in an Engagement to Review a Financial Report
Appendix 3: An Auditor’s Review Report under the Corporations Act 2001
Appendix 4: Example of an Unmodified Auditor’s Review Report on a Financial Report - Fair Presentation Framework
Example of an Auditor’s Review Report with a Qualified Conclusion (Except For) for a Departure from the Applicable Financial Reporting Framework – Fair Presentation Framework
Example of an Auditor’s Review Report with a Qualified Conclusion for a Limitation On Scope Not Imposed by Management -Fair Presentation Framework
Example of an Auditor’s Review Report with an Adverse Conclusion for a Departure from the Applicable Financial Reporting Framework -
Fair Presentation Framework
Example of an Unmodified Auditor’s Review Report on a Financial Report -
Compliance Framework
The AUASB issues Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor
This is an opening excerpt, not the complete document.