Standards for Review Engagements

OBJECTIVE AND SCOPE OF THIS PROJECT

Standards for review engagements are being revised to improve their robustness by reflecting current practice and appropriately addressing the needs expressed and issues raised by Canadian stakeholders.

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Performance of review engagements has evolved over the 20 years since the existing standards were issued.

This project will include revising or replacing Section 8100, General Review Standards, Section 8200, Public Accountant’s Review of Financial Statements, and Section 8500, Reviews of Financial Information Other than Financial Statements. This may involve adoption of International Standard on Review Engagements (ISRE) 2400, Engagements to Review Historical Financial Statements.

Key issues that this project plans to address include:

  • the need for a set of comprehensive review engagement standards that “stand alone” (i.e., the standards would contain complete guidance so that users need not refer to other standards in the Handbook for guidance);
  • determining the nature and extent of review engagement procedures; and
  • considering the form and content of the practitioner’s report.

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PROJECT NEWS

Basis for Conclusions – CSRE 2400, Engagements to Review Historical Financial Statements
April 1, 2016. This document summarizes the process followed in developing this standard and the conclusions reached by the AASB regarding significant comments received in response to its Exposure Drafts.

AASB Decision Summary – November 30–December 1, 2015 
The AASB unanimously approved CSRE 2400, Engagements to Review Historical Financial Statements. The AASB concluded that changes made in finalizing the CSRE were not significantly different from the proposals in the Re-exposure Draft and, therefore, no re-exposure is necessary. The revisions will be effective for reviews of financial statements for periods ending on or after December 14, 2017 and will be reflected in an April 2016 Handbook update. Early adoption of CSRE 2400 will not be permitted.

AASB Decision Summary – September 16-18, 2015 
The AASB reviewed comments received from Canadian stakeholders on its Re-exposure Draft of proposed CSRE 2400, Engagements to Review Historical Financial Statements. Respondents indicated support for the Re-exposure Draft; however, they made various suggestions for changes to proposed CSRE 2400. Key views expressed by respondents where changes were suggested were discussed by the AASB and include the following:

  • the need for more specific guidance about the nature and extent of procedures to be performed between the date of the financial statements and the date of the practitioner’s report;
  • whether a requirement or application material addressing dual-dating of the practitioner’s report should be added;
  • adding definitions of the terms “fair presentation framework” and “compliance framework”; and
  • adding a sample management representations letter.

The AASB expects to approve a final standard at its November 2015 meeting.

Webinar – Revised Standard on Engagements to Review Historical Financial Statements: Re-exposure Draft  
May 13, 2015. Tune into this webinar on June 5, 2015 (English) and June 8, 2015 (French) to hear about what is being proposed and how you can provide input to the AASB’s Re-exposure Draft of CSRE 2400, Engagements to Review Historical Financial Statements..

AASB Re-exposure Draft – Engagements to Review Historical Financial Statements
May 5, 2015. The AASB has issued a Re-exposure Draft that proposes a new standard dealing with engagements to review historical financial statements to replace existing review engagement standards. Stakeholders are encouraged to submit their comments, on the form provided, by July 10, 2015.

AASB Decision Summary – February 5, 2015
The AASB unanimously approved a re-exposure draft of a proposed Canadian Standard on Review Engagements (CSRE) 2400, Engagements to Review Historical Financial Statements, to replace existing standards for review engagements. The re-exposure draft is expected to be issued in May 2015 and will have a response date of July 10, 2015.

AASB Decision Summary – November 24-25, 2014
The AASB reviewed a draft re-exposure draft of CSRE 2400, Engagements to Review Historical Financial Statements, and discussed issues including:

  • whether the scope of CSRE 2400 should be expanded to include interim review engagements that are not covered by Section 7060, Auditor Review of Interim Financial Statements;
  • whether a reporting requirement should be added to address circumstances when the prior period practitioner’s report included a modified conclusion on a matter that remains unresolved in the current period;
  • the format and content of the practitioner’s report; and
  • the proposed effective date of the standard.

The AASB concluded that there has been a significant change from the Exposure Draft and re-exposure is necessary. The AASB will review final revisions to the re-exposure draft, with a goal of approving it in early 2015.

AASB Decision Summary – September 8-9, 2014
The AASB reviewed changes to the AASB’s Exposure Draft of proposed CSRE 2400, Engagements to Review Historical Financial Statements, made to reflect comments received on exposure. The AASB will continue to discuss issues on this topic at future meetings.

AASB Decision Summary – June 9-10, 2014
The AASB discussed issues related to revising standards for review engagements in Canada, including:

  • whether International Standard on Review Engagements (ISRE) 2400, Engagements to Review Historical Financial Statements, provides an appropriate basis for the Canadian standard;
  • the extent to which the practitioner’s understanding of the entity and its environment should include the entity’s internal control;
  • how the concept of risk should be applied in a review engagement;
  • whether the concept of plausibility should be retained in the Canadian standard;
  • requirements and application material related to the performance of analytical procedures in a review engagement; and
  • the proposed form and content of the practitioner’s report.

The AASB will continue to discuss issues on this topic at future meetings.

AASB Decision Summary – March 10-11, 2014
At its January 2014 meeting, the AASB reviewed comments received from Canadian stakeholders on the AASB’s Exposure Draft of proposed Canadian Standard on Review Engagements (CSRE) 2400, Engagements to Review Historical Financial Statements. The AASB will continue to discuss issues raised at future meetings. The AASB decided that, as a result, the effective date of the standard proposed in the Exposure Draft will be deferred.

AASB Decision Summary – January 20-21, 2014
The AASB reviewed comments received from Canadian stakeholders on the AASB’s Exposure Draft of proposed Canadian Standard on Review Engagements (CSRE) 2400, Engagements to Review Historical Financial Statements. The AASB will continue to discuss issues at its March 2014 meeting.

Exposure Draft – Engagements to Review Historical Financial Statements
September 27, 2013. The deadline for comments has been extended to December 11, 2013 from October, 2013 to allow sufficient time for consultation with stakeholders.

Roundtable Discussions – Stakeholders’ Views Sought on Three Exposure Drafts
August 22, 2013. Register to attend a roundtable discussion in September and October 2013 to share your views. The various proposals may result in changes to work effort, the form of reporting or both, and will affect a wide range of users.

Webinar – Revised Standard on Engagements to Review Historical Financial Statements: Improvements Proposed
August 16, 2013.  Register for this webinar to hear about what is being proposed and how you can provide input to the AASB’s Exposure Draft of CSRE 2400, Engagements to Review Historical Financial Statements. This webinar takes place on September 9, 2013 at 12:30 EST.

Exposure Draft – Engagements to Review Historical Financial Statements
June 27, 2013. The AASB has issued an Exposure Draft that propose a new standard dealing with engagements to review historical financial statements to replace the existing review engagement standards that cover the same matters. Stakeholders are encouraged to submit their comments, on the form provided, by October 11, 2013.

AASB Decision Summary – April 8-9, 2013
The AASB unanimously approved its exposure draft of a proposed Canadian Standard on Review Engagements (CSRE) 2400, Engagements to Review Historical Financial Statements, to replace existing standards for review engagements. The exposure draft is expected to be issued in June 2013 and will have a response date of October 11, 2013.

AASB Decision Summary – February 4-5, 2013
The AASB discussed issues related to revising standards for review engagements in Canada, including possible amendments that could be made to the International Standard on Review Engagements (ISRE) 2400, Engagements to Review Historical Financial Statements, that will allow the AASB to adopt ISRE 2400 as a Canadian standard. The AASB is expected to approve its exposure draft at its April 2013 meeting.

AASB Decision Summary – December 3-4, 2012
The AASB discussed issues related to revising standards for review engagements in Canada. The AASB will discuss further issues at its April and June 2013 meetings. An exposure draft is expected to be issued in the fall of 2013.

AASB Decision Summary – September 10-11, 2012
The AASB discussed the future direction of the project to revise standards for review engagements in Canada and key issues that will need to be addressed. The AASB decided that the most appropriate approach is to adopt ISRE 2400, Engagements to Review Financial Statements, as a Canadian standard with some Canadian amendments to address significant issues particular to Canada. At its December 2012 meeting, the AASB will further discuss issues identified by the Review Engagements Task Force.

AASB Decision Summary – March 5-6, 2012
The AASB discussed issues related to the IAASB’s project to revise ISRE 2400, Engagements to Review Historical Financial Statements, and the AASB’s project to revise Canadian review engagement standards.

AASB Decision Summary – January 16-17, 2012
The AASB discussed issues related to the IAASB’s project to revise ISRE 2400, Engagements to Review Historical Financial Statements, and the AASB’s project to revise Canadian review engagement standards.

AASB Decision Summary – May 3, 2011
The AASB reviewed comments received on the Invitation to Comment on the IAASB’s Exposure Draft of revisions to ISRE 2400, Engagements to Review Historical Financial Statements, and discussed a draft response letter to the IAASB’s Exposure Draft.

AASB Decision Summary – January 17-18, 2011
The AASB approved the issuance of an Invitation to Comment (ITC) on the IAASB’s ED of ISRE 2400, Engagements to Review Historical Financial Statements. The ITC is expected to be issued by early February 2011 with a response deadline of April 11, 2011.

AASB Decision Summary – March 8-9, 2010
The AASB reviewed the results of initial consultations with stakeholders to determine how the existing review engagement standards are being used in practice and what improvements are needed. This input will assist in determining the nature and extent of changes needed to the review engagement standards. Based on its key findings, the AASB decided to continue with the project to revise the review engagement standards and take the findings into account as it monitors the IAASB’s project to revise International Standard on Review Engagements (ISRE) 2400, Engagements to Review Financial Statements. The AASB will decide at an appropriate time in the future whether to adopt revised ISRE 2400 or develop and issue a different standard for reviews of financial statements.

 

Disclaimer: This project summary has been prepared for information purposes only. Decisions reported are tentative and reflect only the current status of discussions on this project, which may change after further Board deliberations. Decisions to publish Handbook material are final only after a formal ballot process.