Document ID: chunk:federal_register_of_legislation:F2022C01208:reg:14:p38
Version: federal_register_of_legislation:F2022C01208
Segment Type: reg
Provision Reference: reg 14 (pt 38/57)
Character Range: 114383–117570

be disaggregated:

              + by period, for example, revenue or expense items disaggregated into quarterly, monthly, or weekly amounts;

              + by product line or source of revenue;

              + by location, for example by component;

              + by attributes of the transaction, for example, revenue generated by designers, architects, or craftsmen; and

              + by several attributes of the transaction, for example, sales by product and month.

ILLUSTRATIVE DETAILED PROCEDURES THAT MAY BE PERFORMED IN AN ENGAGEMENT TO REVIEW A FINANCIAL REPORT

The enquiry, analytical and other procedures carried out in a review of a financial report are determined by the auditor exercising professional judgement in light of the auditor's assessment of the risk of material misstatement.  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.

General

    1. Confirm that the engagement team complies with relevant independence and ethical requirements.

    2. Prepare and send an engagement letter to the entity.

    3. Discuss the terms and scope of the engagement with the engagement team.

    4. Obtain or update knowledge and understanding of the business, the key internal and external changes (including laws and regulations), and their effect on the scope of the review, materiality and risk assessment.  This can be performed through the following:

      1. Ascertaining whether there have been any significant changes to the nature and scope of operations.

      2. Considering the results and effects of previous audits and review engagements.

      3. Enquiring of persons responsible for financial reporting in respect of matters that impact on the reliability of the underlying accounting records.  For example, considering fraud risk, material weaknesses in internal controls and any significant changes to internal control policies and procedures

      4. Considering the results of any internal audits performed and the subsequent actions taken by management.

      5. Considering whether additional procedures will be required on any significant accounts where internal controls relating to significant processes have been historically unreliable in detecting and preventing errors in the financial report.

      6. The auditor shall enquire of management and, where appropriate, those charged with governance, as to the existence of any actual or suspected non-compliance with provisions of laws and regulations that are generally recognised to have a direct effect on the determination of material amounts and disclosures in the financial statements.  Refer to ASA 250 for further guidance if considered appropriate.

    Assess the relevance and impact of the results of the above procedures on the current period.

   5.         Determine materiality, exercising professional judgement, considering both qualitative and quantitative factors.

  6.       Enquire of persons responsible for financial reporting about the following:

      1.