Document ID: chunk:federal_register_of_legislation:F2022C01208:reg:14:p17
Version: federal_register_of_legislation:F2022C01208
Segment Type: reg
Provision Reference: reg 14 (pt 17/57)
Character Range: 55815–58933

management and, where appropriate, those charged with governance, the extent of the auditor's responsibilities, the assurance obtained, and the nature and form of the report.  The communication ordinarily covers the following matters:

(a)                the objective of a review of a financial report;

(b)                the scope of the review;

(c)                the responsibilities of management and, where appropriate, those charged with governance for:

(i)                 the preparation of the financial report in accordance with the applicable financial reporting framework including where relevant their fair presentation;

(ii)               establishing and maintaining effective internal control relevant to the preparation of the financial report; and

(iii)             making all financial records and related information available to the auditor;

(d)                agreement from management and, where appropriate, those charged with governance:

(i)                 to provide written representations to the auditor to confirm representations made orally during the review, as well as representations that are implicit in the entity's records; and

(ii)               that where any document containing the financial report indicates that the financial report has been reviewed by the entity's auditor, the auditor's review report also will be included in the document; and

(e)                the anticipated form and content of the report to be issued, including the identity of the addressee of the report.

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)

Procedures for a Review of a Financial Report

Understanding the Entity and its Environment, Including its Internal Control

A9.             Under ASA 315 Identifying and Assessing the Risks of Material Misstatement, the auditor who has audited the entity's financial report for one or more annual periods has obtained an understanding of the entity and its environment, the applicable financial reporting framework, and the entity's system of internal control, as it relates to the preparation of the annual financial report, that was sufficient to conduct the audit. In planning a review of a financial report, the auditor needs to update this understanding. The auditor also needs to obtain a sufficient understanding of the entity's system of internal control as it relates to the preparation of the financial report subject to review, as it may differ from internal control as it relates to the preparation of the annual financial report.  (Ref: Para. 13)

    A10.         The auditor needs to use the understanding of the entity and its environment, the applicable financial reporting framework, and the entity's system of internal control, to determine the enquiries to be made and the analytical and other review procedures to be applied, and to identify the particular events, transactions or assertions