A Review is a lower-cost alternative for entities not requiring the level of assurance of a full audit and are allowed by law to opt for a review instead of an audit.
They are a high-level assessment of financial statements by an independent professional that provides comfort to the users of financial statements that nothing has come to the attention of the reviewer that indicates that the financial statements do not give a true and fair view/are not fairly presented. Features:
- Based on ISRE (NZ) 2400 - Review of Historical Financial Statements Performed by an Assurance Practitioner who is Not the Auditor of the Entity.
- Material or potentially material items in the financial statements and notes are identified and appropriate enquiry or analytical tests are devised to give limited assurance that these are not materially misstated (as opposed to "reasonable assurance" in case of audit).
Review engagement templates include:
- Tier 3 PBE - For reviews of Tier 3 PBE jobs with checklists for requirements of Tier 3 PBE with PBE SFR - A (NFP): Public Benefit Entity Simple Format Reporting - Accrual (Not-For-Profit).
- Tier 4 PBE - For reviews of Tier 4 PBE jobs with checklists for requirements of Tier 4 PBE with PBE SFR - C (NFP): Public Benefit Entity Simple Format Reporting - Cash (Not-For-Profit).
- For-Profit Entities - For reviews of small for-profit entities - a version includes checklists for "A Special Purpose Financial Reporting Framework for use by For-Profit Entities" (SPFR for FPEs) issued by CAANZ, and one for other special-purpose entities.
- Body Corporate - For Body Corporate financial statements prepared in terms of generic special purpose policies or in accordance with SPFR for FPEs in accordance with provisions of the Unit Titles Act 2010 and the Unit Title Regulations 2011.
- General (without SSP) - For general review engagements that do not fit above where no Statement of Service Performance is included.
- General (with SSP) - For general review engagements that do not fit above where Statement of Service Performance is included.
(Note that there is a second review standard - NZ SRE 2410 - Review of Financial Statements Performed by the Independent Auditor of the Entity - we have not prepared a template for this as it normally only relates to interim reviews for audit job - something only rarely done - but please contact us if you are doing some of these and would like us to develop).
For a great overview of the Review Engagement Standards and process download the IFAC Guide to Review Engagements.