Document ID: chunk:federal_register_of_legislation:F2022C01208:reg:14:p16
Version: federal_register_of_legislation:F2022C01208
Segment Type: reg
Provision Reference: reg 14 (pt 16/57)
Character Range: 52998–56100

and accounting matters, and applying analytical and other review procedures. A review may bring significant matters affecting the financial report to the auditor's attention, but it does not provide all of the evidence that would be required in an audit.

Performing a Review (Ref: Para 6)

A4.             Through performing the audit of the annual financial report, the auditor obtains an understanding of the entity and its environment, the applicable financial reporting framework, and the entity's system of internal control.  When the auditor is engaged to review the financial report, under paragraph 13, the auditor needs to update this understanding through enquiries made in the course of the review, to assist the auditor in focusing the enquiries to be made and the analytical and other review procedures to be applied. A practitioner who is engaged to perform a review of a financial report, and who is not the auditor of the entity, does not perform the review in accordance with ASRE 2410, as the practitioner ordinarily does not have the same understanding of the entity and its environment, the applicable financial reporting framework, and the entity's system of internal control, as the auditor of the entity.

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.

General Principles of a Review of a Financial Report

A5.             Relevant ethical requirements[5] govern the auditor's professional responsibilities in the following areas: independence, integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour.  (Ref: Para. 8)

A6.             The elements of quality management that are relevant to an individual engagement include leadership responsibilities for managing and achieving quality on the engagement, relevant ethical requirements, acceptance and continuance of client relationships and specific engagements, engagement resources, engagement performance, monitoring and remediation.  ASQM 1 and ASA 220[6] include guidance that may be helpful.  (Ref: Para. 9)

A7.             An attitude of professional scepticism denotes that the auditor makes a critical assessment, with a questioning mind, of the validity of evidence obtained and is alert to evidence that contradicts or brings into question the reliability of documents or representations by management of the entity.  ASA 200 includes guidance which may be helpful. (Ref: Para. 10)

Agreeing the Terms of the Engagement

A8.             Written agreement of the terms of the engagement helps to avoid misunderstandings regarding the nature of the engagement and, in particular, the objective and scope of the review, the responsibilities of 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