1. Reports on review engagements

1.1. Independence

An accountant must be independent of the client to issue a review report on the financial statements of such a client.

1.2. Forming conlcusions

• When forming a conclusion on the financial statements in a review engagement, the accountant should consider the financial statements as a whole to determine whether any modification to the conclusion in the auditor's report is appropriate. The accountant should do the following:

• Evaluate whether the financial statements adequately refer to or describe the applicable financial reporting framework.

• Consider whether, based on the requirements of the applicable financial reporting framework and the results of the procedures:

  • the terminology used, including financial statement titles, is appropriate;

  • the financial statements adequately disclose the significant accounting policies selected and applied and the accounting policies are consistent with the financial reporting framework;

  • accounting estimates made by management appear reasonable;

  • the information presented in the financial statements appears relevant, reliable, comparable, and understandable; and

• the financial statements provide adequate disclosures to enable intended users to understand the effects of material transactions and events on the financial statements.

• Consider the impact of uncorrected misstatements and qualitative aspects of the entity's accounting practices.

• Consider the overall presentation, structure, and content of the financial statements, including whether the underlying transactions and events are presented fairly.

2. Reporting on comparative financial statements

When comparative financial statements are presented, the accountant's report should refer to each period for which financial statements are presented. When reporting on all periods presented, a continuing accountant should update the report on one or more prior periods presented on a comparative basis with those of the current period. When issuing an updated report, the continuing accountant should consider information that the accountant has become aware of during the engagement for the current period financial statements. If, during the current engagement, circumstances or events come to the accountant's attention that may affect the prior period financial statements presented, the accountant should consider the effects on the accountant's report.