A review engagement is an assurance service that provides independent and professional opinions to reduce information risk. The International Standards on Review Engagements (ISRE) are issued by the International Auditing and Assurance Standards Board (IAASB) to guide practitioners in conducting review engagements on historical financial information. These standards aim to enhance the credibility and reliability of reviewed financial statements for decision-makers.
Objective and Scope
The primary objective of ISRE is to establish standards for reviewing historical financial statements. ISRE 2400 (Revised), Engagements to Review Historical Financial Statements, is the key standard in this series. It outlines the practitioner’s responsibilities and the form and content of their report.
- Objective: Establish standards for reviewing historical financial statements.
- Scope: Applies to the review of historical financial statements.
Level of Assurance
A review engagement provides limited assurance, which is less than the assurance provided in an audit. The practitioner concludes whether anything has come to their attention that causes them to believe the financial statements are not prepared in accordance with the applicable financial reporting framework.
Procedures
In a review engagement, the practitioner performs primarily analytical procedures and inquiries. These procedures help obtain sufficient appropriate evidence to conclude on the financial statements as a whole.
Reporting
ISRE 2400 (Revised) provides guidance on the form and content of the practitioner’s report. It includes a clear expression of the practitioner’s conclusion based on the work performed.
Relationship with ISAs
While ISREs are separate from International Standards on Auditing (ISAs), they are designed to be consistent with the principles and concepts in ISAs. This ensures that review engagements are conducted consistently and effectively.