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).
2023 Series updates:
- Combining the old Records Required for Review, Governance Checklist and Fraud Questionnaire with the Items Required for Review page so as to reduce the work required.
- Removing some unnecessary steps from risk assessment, acknowledging that risk assessment for Reviews is much less detailed than the requirements for Audit.
- Adding a page for testing the Statement of Cash flows.
- Combining Planning and Strategy all onto one page.
- Adding a link on each lead schedule to the reporting checklists (tier 3 and 4 and SPFR for FPE jobs).
- Reducing content on pages like Entity and Environment to a more appropriate level for Review Engagements.
- Where substantive testing using sampling is required (and it normally will not be required in a Review) we have added our sampling tool.
- We have updated the sequence of pages in the finalising sections to more closely follow the flow of the job.
For Tier 3 and 4 (NFP) jobs, we include checklists referencing the latest standards that must be applied for accounting periods that begin on or after 1 April 2024. A Tier 3 or 4 entity may choose to apply these Standards before the mandatory date for accounting periods that end after the Standard takes effect on 15 June 2023. So we suggest you wait until the client reporting swaps over before changing to the 2023 series for Tier 3 or 4 jobs. The other 2023 series review templates may be adopted immediately.
Review engagement templates now include:
- Tier 3 (NFP) Review (2023) - For reviews of Tier 3 (NFP) jobs with checklists for requirements of the 2023 Tier 3 standard.
- Tier 4 (NFP) Review (2023) - For reviews of Tier 4 (NFP) jobs with checklists for requirements of the 2023 Tier 4 standard.
- Special Purpose Review (2023) - For reviews of small and medium-sized for-profit entities using any type of special purpose reporting (includes checklists for "A Special Purpose Financial Reporting Framework for use by For-Profit Entities" (SPFR for FPEs) issued by CAANZ).
- Body Corporate Review (2023) - For review of Body Corporates financial statements (either in accordance with the Special Purpose Framework for use by For-Profit Entities (SPFR for FPEs) by CAANZ or in terms of other special-purpose policies) in accordance with Unit Titles Act 2010 and the Unit Titles Regulations 2011.
- General Review (2023) - For general review engagements that are not NZ Tier 3 or 4 or special purpose reporting.
*(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.