Before this amendment, ISRE indicated that it may be applied "to the extent practicable" to engagements to review other information. About the IAASB and IFAC The objective of the IAASB is to serve the public interest by setting high quality auditing and assurance standards and by facilitating the convergence of international and national standards, thereby enhancing the quality and uniformity of practice throughout the world and strengthening public confidence in the global auditing and assurance profession. IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of members and associates in countries and jurisdictions, representing more than 2.
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To address what are recognized as outdated standards, encourage consistency in practice, and to align with international standards, a new Canadian Standard on Review Engagements CSRE was developed. The standard is effective for reviews of annual and interim financial statements for periods ending on or after December 14, While the standards contained in CSRE apply to the practitioner, companies whose financial statements are being reviewed will be affected as well.
This publication has been developed for both preparers of financial statements and other users of the financial statements such that they will understand significant new procedures required of the practitioner, what the new review engagement report will look like, and the increased emphasis on communication between the preparer of financial statements and the practitioner.
Performance of the Review Engagement Under the old standard of review engagements, the practitioner exercised professional judgment in deciding which items on the financial statements he or she would review. Because of the above requirements, preparers of financial statements may observe that practitioners are increasing their work in some areas and reducing their work in others.
Additionally, the requirement to identify areas in the financial statements where material misstatements are likely to arise and to inquire about specific areas will necessitate a greater understanding of the entity by the practitioner and so there may be an increase in the amount and depth of inquiries posed to management and those charged with governance for example, an owner-manager, the board of directors, or the audit committee.
In conjunction with the anticipated increase in inquiry noted above, the practitioner will rely on the cooperation and availability of both management and TCWG to respond to such inquiries and other requests, and to share information to assist the practitioner in his or her understanding of the entity and other relevant matters. All misstatements accumulated during the review, with the request that such misstatements be corrected. Practically speaking, despite the lengthened report and amended wording, the practitioner is still providing a level of assurance on the financial statements consistent with that provided under the old standard for review engagements.
For an example of what a typical report will look like, please refer to the illustrative example at the end of this publication. These requests may be in the form of completing a questionnaire or worksheet, or requests to gather and prepare certain information, schedules, or analyses. In Conclusion The new standard CSRE will rely upon increased inquiry by the practitioner, as well as enhanced and timely communication and sharing of information between the practitioner, management, and those charged with governance.
The benefits of expanded communications will help each of the practitioner, management and TCWG to discharge their respective responsibilities and ultimately result in a more meaningful and effective engagement. We conducted our review in accordance with Canadian generally accepted standards for review engagements, which require us to comply with relevant ethical requirements. A review of financial statements in accordance with Canadian generally accepted standards for review engagements is a limited assurance engagement.
The practitioner performs procedures, primarily consisting of making inquiries of management and others within the entity, as appropriate, and applying analytical procedures, and evaluates the evidence obtained.
The procedures performed in a review are substantially less in extent than, and vary in nature from, those performed in an audit conducted in accordance with Canadian generally accepted auditing standards. Accordingly, we do not express an audit opinion on these financial statements. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the financial statements do not present fairly, in all material respects, the financial position of ABC Company as at December 31, 20X1, and the results of its operations and its cash flows for the year then ended in accordance with Canadian accounting standards for private enterprises.
This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. BDO Canada LLP, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.
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The scope of assurance reporting covers internal controls over the service the service organisation provides and is not restricted to controls related to financial reporting. The guidance contains reporting and assessment criteria for a range of financial service organisations. The UK Stewardship Code was issued to enhance the quality of engagement between institutional investors and companies they invest in to help improve long-term returns to shareholders and the efficient exercise of governance responsibilities. Assurance engagements: Management of risk and liability Guidance which assists accountants to mitigate their risks and liability when undertaking assurance engagements. The document is available from frc. Sustainability assurance: Your choice This booklet from ICAEW highlights key issues around the assurance of sustainability information using a series of questions and answers.
At a Glance: ISRE 2400 (Revised): Engagements to Review Historical Financial Statements
CSRE 2400, A New Standard for Review Engagements
Standards and guidance