Standards are issued by the International Auditing and Assurance Standards Board (IAASB) to provide guidance for practitioners when conducting review engagements on historical financial information. Key points about ISRE:
- Objective: The main objective of ISRE is to establish standards and provide guidance on the practitioner’s responsibilities when reviewing historical financial statements and the form and content of the practitioner’s report.
- Scope: ISRE 2400 (Revised), Engagements to Review Historical Financial Statements, is the primary standard in this series and 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 on whether anything has come to their attention that causes them to believe that the financial statements are not prepared, in all material respects, by the applicable financial reporting framework.
- Procedures: In a review engagement, the practitioner performs primarily analytical procedures and inquiries to obtain sufficient appropriate evidence to conclude the financial statements as a whole.
- Reporting: ISRE 2400 (Revised) provides guidance on the form and content of the practitioner’s report, which includes a clear expression of the practitioner’s conclusion on the financial statements 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, adapted as necessary in the context of a review engagement.
ISRE provides a framework for practitioners to conduct review engagements on historical financial information consistently and effectively, enhancing the credibility and reliability of the reviewed financial statements for users.