General Review Standards

Section 8100

General Review Standards

Section 8100

What is a review engagement?
  • Reviews are different from audits in that the scope of a review is less than that of an audit and therefore the level of assurance provided is lower
  • The objective of a review is to assess whether the information being reported on is plausible within the framework (i.e. IFRS, ASPE)
  • A review consists primarily of inquiry, analytical procedures and discussion
    • These are normally sufficient for the purposes of considering whether information is plausible
    • Examples of analytical procedure include comparing the current and prior period information and considering the reasonableness of financial and other inter-relationships
  • A review does not require the public accountant to seek supporting or independent evidence or to study and evaluate internal control
  • A review will not normally include procedures such as physical inspection, observation of client procedures, confirmation from external parties and examination of documents which are usually performed in an audit
    • However, when there is reason to doubt the plausibility of information obtained, additional procedures which might also be carried out in an audit can be performed
  • In a review engagement, a negative assurance is provided
    • i.e. nothing has come to the attention of the public accountant that causes him or her to believe that the information being reported on is not, in all material respects, in accordance with appropriate criteria
Acceptance of Engagement
  • Before accepting a review engagement, the public accountant should be satisfied that:
    • The subject matter is within the professional expertise of public accountants
    • There are appropriate criteria against which the subject matter can be evaluated
  • To avoid misunderstandings of the terms of the review engagement, the agreement with the client would normally specify:
    • That the public accountant will conduct the review in accordance with generally accepted standards for review engagements
    • The anticipated form and content of the report, including any restrictions on its use;
    • That an engagement is not intended to result in the expression of an audit opinion;
    • That management will provide the information the public accountant requires;
    • That management is responsible for the accuracy and completeness of the information
    • That a review engagement cannot be relied on to prevent or detect error and fraud
    • That each page of the information being reported on will be marked as being unaudited
    • Please see section 8100 for more
Standards Applicable to Review Engagements
  • General Standards
    • Adequate technical training and proficiency in conducting reviews, with due care and with an objective state of mind
  • Review standards
    • Work adequately planned and properly executed and assistants properly supervised
    • The accountant should acquire sufficient knowledge of the business so that intelligent inquiry and assessment of information obtained can be made
    • The accountant should perform a review with the limited objective of assessing whether the information is plausible within the framework of appropriate criteria
  • Reporting standards
    • The review engagement report should indicate the scope of the review. The nature of the review engagement should be made evident and be clearly distinguished from an audit.
    • The report should indicate, based on the review:
      • whether anything has come to the public accountant’s attention that causes him or her to believe that the information being reported on is not, in all material respects, in accordance with appropriate criteria; or
      • that no assurance can be provided
    • The date of substantial completion of the review would be used as the date of the review engagement report
      • i.e. the date by which the accountant has performed sufficient procedures to support the content of the report
Reservations in the review engagement report
  • A reservation should be expressed in the review engagement report when the accountant:
    • is unable to complete the review because there is a lack of information or because it is impractical to obtain satisfactory information, and is thus unable to decide whether some or all of the information is plausible; or
    • concludes that there is a departure from the appropriate criteria
    • concludes that any significant interpretations of provisions of an agreement or regulation referred to in the report are not appropriate or reasonable

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