A5 Review Reports

Question 1

Emphasis of Matter / Other Matter Paragraphs

Answer 1

In some instances the accountant is required to include an emphasis of matter or other matter matter paragraph in the review report. These include:

When mgmt revise the FS for a subsequently discovered fact that differs from the original review report.

FS is prepared in accordance with special purpose framework

When reporting on comparative FS when the prior period is audited, going concern issues, as well as supplementary info that accompanies that reviewed FS & review report

Question 2

Purpose of Emphasis of Matter Paragraphs

Answer 2

These draw’s user’s attention to a matter appropriately presented in the FS. These include important litigation or regulatory action, a major catastrophe, related party transactions & subsequent events.

Question 3

Using The Work of Others

Answer 3

In a review report, if the accountant of the reporting entity decides not to assume responsibility for the audit review performed by other accountants:

They can make reference to any accountants who audited or reviewed significant components as long as the other accountant’s report is not restricted

Reference to other accountants would occur in the accountants responsibility paragraph & should indicate the portion of the FS audited or reviewed by the other accountants.

Question 4

Review Engagements

Answer 4

Involves performing inquiry & analytical procedures to provide limited assurance that no material modifications should be made to the financial statements for them to be in conforming with the applicable financial reporting framework.

Governed by SSARS

Question 5

Nature of Review Engagements

Answer 5

Nature of review engagements involve substantially less scope than an audit. It primarily consists of inquiry and analytical procedures.

Question 6

Modifications to Review Report

Answer 6

These are made to the standard review report only when there is a a departure from GAAP (unless its material & pervasive then an adverse conclusion is given)

Question 7

Prior Period Reviews

Answer 7

When the prior period has been audited, the accountant should issue the current period compilation or review report, any additional paragraph should include:

Statement that prior period was audited
Date of previous report
Opinion expressed (if modified the reasons why)
No auditing procedures had been performed since previous report date