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Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity (July 2020)
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1. When, as a result of performing a review of a 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 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.
2. 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. (Ref: Para. A39)
3. When, in the auditor’s judgement, those charged with governance do not respond appropriately within a reasonable period of time, the auditor shall consider:
1. Whether to modify the auditor’s review report; or
2. The possibility of withdrawing from the engagement; and
3. The possibility of resigning from the appointment to audit the annual financial report. (Ref: Para.A37 and A62)
4. 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, the auditor shall:
1. Communicate the matter unless prohibited by law or regulation, as soon as practicable to management and where appropriate those charged with governance;
2. Request management’s assessment of the effect (s) on the financial report;
3. Consider the effect on the auditor’s conclusion and the auditor’s review report; and
4. Determine whether law, regulation or relevant ethical requirements:
1. require the auditor to report to an appropriate authority outside the entity;
2. establish responsibilities under which reporting to an appropriate authority outside the entity may be appropriate in the circumstances. (Ref: Para. A39 – A41)
5. The auditor shall communicate relevant matters of governance interest arising from the review of the financial report to those charged with governance. (Ref: Para. A42 and A63)