The assurance practitioner shall have an understanding of the entire text of this ASRE, including its application and other explanatory material, to understand its objectives and to apply its requirements properly. (Ref: Para. A14)

Complying with Relevant Requirements

The assurance practitioner shall comply with each requirement of this ASRE, unless a requirement is not relevant to the review engagement. A requirement is relevant to the review engagement when the circumstances addressed by the requirement exist.

The assurance practitioner shall not represent compliance with this ASRE in the assurance practitioner’s report unless the assurance practitioner has complied with all the requirements of this ASRE relevant to the review engagement.

The assurance practitioner shall comply with relevant ethical requirements, including those pertaining to independence.^[*](Ref: Para. A15–A16)

The assurance practitioner shall plan and perform the engagement with professional scepticism recognising that circumstances may exist that cause the financial statements to be materially misstated. (Ref: Para. A17–A20)

The assurance practitioner shall exercise professional judgement in conducting a review engagement. (Ref: Para. A21–A25)

The engagement partner shall have competence in assurance skills and techniques and in financial reporting, and capabilities, including having sufficient time, appropriate to the engagement circumstances. (Ref: Para. A26)

The engagement partner shall take overall responsibility for: (Ref: Para. A27–A30)

1. Managing and achieving quality on each review engagement to which that partner is assigned and be sufficiently and appropriately involved throughout the engagement;
2. The direction, supervision, planning and performance of the review engagement in compliance with professional standards and applicable legal and regulatory requirements; (Ref: Para. A31)
3. The assurance practitioner’s report being appropriate in the circumstances; and
4. The engagement being performed in accordance with the firm’s quality management policies or procedures, including:
   1. Being satisfied that the firm's policies or procedures for the acceptance and continuance of client relationships and review engagements have been followed, and that conclusions reached are appropriate, including considering whether there is information that would lead the engagement partner to conclude that management lacks integrity; (Ref: Para. A32–A33)
   2. Determining that sufficient and appropriate resources to perform the engagement are assigned or made available to the engagement team in a timely manner, taking into account the nature and circumstances of the engagement, the firm’s policies or procedures, and any changes that may arise during the engagement.
   3. Being satisfied that the engagement team collectively has the appropriate competence and capabilities, including having sufficient time, as well as assurance skills and techniques and expertise in financial reporting, to:
      1. Perform the review engagement in accordance with professional standards and applicable legal and regulatory requirements; and
      2. Enable a report that is appropriate in the circumstances to be issued; and
   4. Taking responsibility for appropriate engagement documentation being maintained.
   5. When an engagement quality review is required in accordance with ASQM 1 or the firm’s policies or procedures, not dating the report until the completion of the engagement quality review.^[6]

Relevant Considerations after Engagement Acceptance

If the engagement partner obtains information that would have caused the firm to decline the engagement had that information been available earlier, the engagement partner shall communicate that information promptly to the firm, so that the firm and the engagement partner can take the necessary action.

Compliance with Relevant Ethical Requirements

Throughout the engagement, the engagement partner shall remain alert, through observation and making enquiries as necessary, for evidence of breaches of relevant ethical requirements by members of the engagement team.  If matters come to the engagement partner’s attention through the firm’s system of quality management or otherwise that indicate that members of the engagement team have breached relevant ethical requirements, the engagement partner, in consultation with others in the firm, shall determine the appropriate action.

Monitoring and Remediation

A firm’s system of quality management includes establishing a monitoring and remediation process to

1. Provide the firm with relevant, reliable and timely information about the design, implementation and operation of the system of quality management.
2. Take appropriate actions to respond to identified deficiencies such that deficiencies are remediated by the firm on a timely basis.

The engagement partner shall consider the information from the firm’s monitoring and remediation process, as communicated by the firm and, if applicable, other network firms and whether the information may affect the review engagement.

Factors Affecting Acceptance and Continuance of Client Relationships and Review Engagements

Unless required by law or regulation, the assurance practitioner shall not accept a review engagement if: (Ref: Para. A34–A35)

1. The assurance practitioner is not satisfied:
   1. That there is a rational purpose for the engagement; or (Ref: Para. A36)
   2. That a review engagement would be appropriate in the circumstances; (Ref: Para. A37)
2. The assurance practitioner has reason to believe that relevant ethical requirements, including independence, will not be satisfied;
3. The assurance practitioner’s preliminary understanding of the engagement circumstances indicates that information needed to perform the review engagement is likely to be unavailable or unreliable; (Ref: Para. A38)
4. The assurance practitioner has cause to doubt management’s integrity such that it is likely to affect proper performance of the review; or (Ref: Para. A37(b))
5. Management or those charged with governance impose a limitation on the scope of the assurance practitioner’s work in the terms of a proposed review engagement such that the assurance practitioner believes the limitation will result in the assurance practitioner disclaiming a conclusion on the financial statements.

Preconditions for Accepting a Review Engagement

Prior to accepting a review engagement, the assurance practitioner shall: (Ref: Para. A39)

1. Determine whether the financial reporting framework applied in the preparation of the financial statements is acceptable including, in the case of special purpose financial statements, obtaining an understanding of the purpose for which the financial statements are prepared and of the intended users; and (Ref: Para. A40–A46)
2. Obtain the agreement of management that it acknowledges and understands its responsibilities: (Ref: Para. A47–A50)
   1. For preparation of the financial statements in accordance with the applicable financial reporting framework, including, where relevant, their fair presentation;
   2. For such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; and
   3. To provide the assurance practitioner with:
      1. Access to all information of which management is aware that is relevant to the preparation of the financial statements, such as records, documentation and other matters;
      2. Additional information that the assurance practitioner may request from management for the purpose of the review; and
      3. Unrestricted access to persons within the entity from whom the assurance practitioner determines it necessary to obtain evidence.

If the assurance practitioner is not satisfied as to any of the matters set out above as preconditions for accepting a review engagement, the assurance practitioner shall discuss the matter with management or those charged with governance.  If changes cannot be made to satisfy the assurance practitioner as to those matters, the assurance practitioner shall not accept the proposed engagement unless required by law or regulation to do so.  However, an engagement conducted under such circumstances does not comply with this ASRE. Accordingly, the assurance practitioner shall not include any reference within the assurance practitioner’s report to the review having been conducted in accordance with this ASRE.

If it is discovered after the engagement has been accepted that the assurance practitioner is not satisfied as to any of the above preconditions, the assurance practitioner shall discuss the matter with management or those charged with governance, and shall determine:

1. Whether the matter can be resolved;
2. Whether it is appropriate to continue with the engagement; and
3. Whether and, if so, how to communicate the matter in the assurance practitioner’s report.

Additional Considerations When the Wording of the Assurance Practitioner’s Report Is Prescribed by Law or Regulation

The assurance practitioner’s report issued for the review engagement shall refer to this ASRE only if the report complies with the requirements of paragraph 86.

In some cases, when the review is performed pursuant to applicable law or regulation of a jurisdiction, the relevant law or regulation may prescribe the layout or wording of the assurance practitioner’s report in a form or in terms that are significantly different from the requirements of this ASRE.  In those circumstances, the assurance practitioner shall evaluate whether users might misunderstand the assurance obtained from the review of the financial statements and, if so, whether additional explanation in the assurance practitioner’s report can mitigate possible misunderstanding. (Ref: Para. A51, A148)

If the assurance practitioner concludes that additional explanation in the assurance practitioner’s report cannot mitigate possible misunderstanding, the assurance practitioner shall not accept the review engagement unless required by law or regulation to do so.  A review conducted in accordance with such law or regulation does not comply with this ASRE.  Accordingly, the assurance practitioner shall not include any reference within the assurance practitioner’s report to the review having been conducted in accordance with this ASRE. (Ref: Para. A51, A148)

Agreeing the Terms of Engagement

The assurance practitioner shall agree the terms of the engagement with management or those charged with governance, as appropriate, prior to performing the engagement.

The agreed terms of engagement shall be recorded in an engagement letter or other suitable form of written agreement, and shall include: (Ref: Para. A52–A54, A56)

1. The intended use and distribution of the financial statements, and any restrictions on use or distribution where applicable;
2. Identification of the applicable financial reporting framework;
3. The objective and scope of the review engagement;
4. The responsibilities of the assurance practitioner;
5. The responsibilities of management, including those in paragraph 30(b); (Ref: Para. A47–A50, A55)
6. A statement that the engagement is not an audit, and that the assurance practitioner will not express an audit opinion on the financial statements; and
7. Reference to the expected form and content of the report to be issued by the assurance practitioner, and a statement that there may be circumstances in which the report may differ from its expected form and content.

Recurring Engagements

On recurring review engagements, the assurance practitioner shall evaluate whether circumstances, including changes in the engagement acceptance considerations, require the terms of engagement to be revised and whether there is a need to remind management or those charged with governance, as appropriate, of the existing terms of engagement. (Ref: Para. A57)

Acceptance of a Change in the Terms of the Review Engagement

The assurance practitioner shall not agree to a change in the terms of the engagement where there is no reasonable justification for doing so. (Ref: Para. A58–A60)

If, prior to completing the review engagement, the assurance practitioner is requested to change the engagement to an engagement for which no assurance is obtained, the assurance practitioner shall determine whether there is reasonable justification for doing so. (Ref: Para. A61–A62)

If the terms of engagement are changed during the course of the engagement, the assurance practitioner and management or those charged with governance, as appropriate, shall agree on and record the new terms of the engagement in an engagement letter or other suitable form of written agreement.

The assurance practitioner shall communicate with management or those charged with governance, as appropriate, on a timely basis during the course of the review engagement, all matters concerning the review engagement that, in the assurance practitioner’s professional judgement, are of sufficient importance to merit the attention of management or those charged with governance, as appropriate. (Ref: Para. A63–A69)

Materiality in a Review of Financial Statements

The assurance practitioner shall determine materiality for the financial statements as a whole, and apply this materiality in designing the procedures and in evaluating the results obtained from those procedures. (Ref: Para. A70–A73)

The assurance practitioner shall revise materiality for the financial statements as a whole in the event of becoming aware of information during the review that would have caused the assurance practitioner to have determined a different amount initially. (Ref. Para. A74)

The Assurance Practitioner’s Understanding

The assurance practitioner shall obtain an understanding of the entity and its environment, and the applicable financial reporting framework, to identify areas in the financial statements where material misstatements are likely to arise and thereby provide a basis for designing procedures to address those areas. (Ref: Para. A75–A77)

The assurance practitioner’s understanding shall include the following: (Ref: Para. A78, A87, A90)

1. Relevant industry, regulatory, and other external factors including the applicable financial reporting framework;
2. The nature of the entity, including:
   1. Its operations;
   2. Its ownership and governance structure;
   3. The types of investments that the entity is making and plans to make;
   4. The way that the entity is structured and how it is financed; and
   5. The entity’s objectives and strategies;
3. The entity’s accounting systems and accounting records;
4. The entity’s selection and application of accounting policies; and

Internal control as it relates to the preparation of the financial statements.

Designing and Performing Procedures

In obtaining sufficient appropriate evidence as the basis for a conclusion on the financial statements as a whole, the assurance practitioner shall design and perform enquiry and analytical procedures: (Ref: Para. A79–A83, A87, A90)

1. To address all material items in the financial statements, including disclosures; and
2. To focus on addressing areas in the financial statements where material misstatements are likely to arise.

The assurance practitioner’s enquiries of management and others within the entity, as appropriate, shall include the following: (Ref: Para. A84–A88)

1. How management makes the significant accounting estimates required under the applicable financial reporting framework;
2. The identification of related parties and related party transactions, including the purpose of those transactions;
3. Whether there are significant, unusual or complex transactions, events or matters that have affected or may affect the entity’s financial statements, including:
   1. Significant changes in the entity’s business activities or operations;
   2. Significant changes to the terms of contracts that materially affect the entity’s financial statements, including terms of finance and debt contracts or covenants;
   3. Significant journal entries or other adjustments to the financial statements;
   4. Significant transactions occurring or recognised near the end of the reporting period;
   5. The status of any uncorrected misstatements identified during previous engagements; and
   6. Effects or possible implications for the entity of transactions or relationships with related parties;
4. The existence of any actual, suspected or alleged:
   1. Fraud or illegal acts affecting the entity; and
   2. Non-compliance with provisions of laws and regulations that are generally recognised to have a direct effect on the determination of material amounts and disclosures in the financial statements, such as tax and superannuation laws and regulations;
5. Whether management has identified and addressed events occurring between the date of the financial statements and the date of the assurance practitioner’s report that require adjustment of, or disclosure in, the financial statements;
6. The basis for management’s assessment of the entity’s ability to continue as a going concern; (Ref: Para. A89)
7. Whether there are events or conditions that appear to cast doubt on the entity’s ability to continue as a going concern;
8. Material commitments, contractual obligations or contingencies that have affected or may affect the entity’s financial statements, including disclosures; and
9. Material non-monetary transactions or transactions for no consideration in the financial reporting period under consideration.

In designing analytical procedures, the assurance practitioner shall consider whether the data from the entity’s accounting system and accounting records are adequate for the purpose of performing the analytical procedures. (Ref: Para.  A90–A92)

Procedures to Address Specific Circumstances

Related parties

During the review, the assurance practitioner shall remain alert for arrangements or information that may indicate the existence of related party relationships or transactions that management has not previously identified or disclosed to the assurance practitioner.

If the assurance practitioner identifies significant transactions outside the entity’s normal course of business in the course of performing the review, the assurance practitioner shall enquire of management about:

1. The nature of those transactions;
2. Whether related parties could be involved; and
3. The business rationale (or lack thereof) of those transactions.

Fraud and non‑compliance with laws and regulations

When there is an indication that fraud or non-compliance with laws and regulations, or suspected fraud or non-compliance with laws and regulations, has occurred in the entity, the assurance practitioner shall:

1. Communicate that matter, unless prohibited by law and regulation, with the appropriate level of management or those charged with governance as appropriate; (Ref: Para. A93)
2. Request management’s assessment of the effect(s), if any, on the financial statements;
3. Consider the effect, if any, of management’s assessment of the effects of identified or suspected fraud or non-compliance with laws and regulations communicated to the assurance practitioner on the assurance practitioner’s conclusion on the financial statements and on the assurance practitioner’s report; and
4. Determine whether law, regulation or relevant ethical requirements: (Ref: Para. A94-A98)
   1. Require the assurance practitioner to report to an appropriate authority outside the entity.
   2. Establish responsibilities under which reporting to an appropriate authority outside the entity may be appropriate in the circumstances.

Going concern

A review of financial statements includes consideration of the entity’s ability to continue as a going concern. In considering management’s assessment of the entity’s ability to continue as a going concern, the assurance practitioner shall cover the same period as that used by management to make its assessment as required by the applicable financial reporting framework, or by law or regulation where a longer period is specified.

In evaluating management’s assessment of the entity’s ability to continue as a going concern, the assurance practitioner shall consider the relevant period, which may be the same or may differ from that used by management to make its assessment as required by the applicable financial reporting framework.  If management’s assessment of the entity’s ability to continue as a going concern covers less than the relevant period, the assurance practitioner shall request management to correspond to the relevant period used by the assurance practitioner.

Relevant period means the period of approximately 12 months from the date of the assurance practitioner’s current report, and if applicable, to the expected date of the assurance practitioner’s report for:

1. the next annual reporting period in the case of annual financial statements; or
2. the corresponding reporting period for the following year in the case of an interim reporting period.

If, during the performance of the review, the assurance practitioner becomes aware of events or conditions that may cast significant doubt about the entity’s ability to continue as a going concern, the assurance practitioner shall: (Ref: Para. A99)

1. Enquire of management about plans for future actions affecting the entity’s ability to continue as a going concern and about the feasibility of those plans, and also whether management believes the outcome of those plans will improve the situation regarding the entity’s ability to continue as a going concern;
2. Evaluate the results of those enquiries, to consider whether management’s responses provide a sufficient basis to:
   1. Continue to present the financial statements on the going concern basis if the applicable financial reporting framework includes the assumption of an entity’s continuance as a going concern; or
   2. Conclude whether the financial statements are materially misstated, or are otherwise misleading regarding the entity’s ability to continue as a going concern; and
3. Consider management’s responses in light of all relevant information of which the assurance practitioner is aware as a result of the review.

Use of work performed by others

In performing the review, it may be necessary for the assurance practitioner to use work performed by other assurance practitioners, or the work of an individual or organisation possessing expertise in a field other than accounting or assurance.  If the assurance practitioner uses work performed by another assurance practitioner or an expert in the course of performing the review, the assurance practitioner shall take appropriate steps to be satisfied that the work performed is adequate for the assurance practitioner’s purposes. (Ref: Para. A80)

Reconciling the Financial Statements to the Underlying Accounting Records

The assurance practitioner shall obtain evidence that the financial statements agree with, or reconcile to, the entity’s underlying accounting records. (Ref: Para. A100)

Additional Procedures When the Assurance Practitioner Becomes Aware that the Financial Statements May Be Materially Misstated

If the assurance practitioner becomes aware of a matter(s) that causes the assurance practitioner to believe the financial statements may be materially misstated, the assurance practitioner shall design and perform additional procedures sufficient to enable the assurance practitioner to: (Ref: Para. A101–A105)

1. Conclude that the matter(s) is not likely to cause the financial statements as a whole to be materially misstated; or
2. Determine that the matter(s) causes the financial statements as a whole to be materially misstated.

If the assurance practitioner becomes aware of events occurring between the date of the financial statements and the date of the assurance practitioner’s report that require adjustment of, or disclosure in, the financial statements, the assurance practitioner shall request management to correct those misstatements.

The assurance practitioner has no obligation to perform any procedures regarding the financial statements after the date of the assurance practitioner’s report. However, if, after the date of the assurance practitioner’s report but before the date the financial statements are issued, a fact becomes known to the assurance practitioner that, had it been known to the assurance practitioner at the date of the assurance practitioner’s report, may have caused the assurance practitioner to amend the report, the assurance practitioner shall:

1. Discuss the matter with management or those charged with governance, as appropriate;
2. Determine whether the financial statements need amendment; and
3. If so, enquire how management intends to address the matter in the financial statements.

If management does not amend the financial statements in circumstances where the assurance practitioner believes they need to be amended, and the assurance practitioner’s report has already been provided to the entity, the assurance practitioner shall notify management and those charged with governance not to issue the financial statements to third parties before the necessary amendments have been made.  If the financial statements are nevertheless subsequently issued without the necessary amendments, the assurance practitioner shall take appropriate action to seek to prevent reliance on the assurance practitioner’s report.

The assurance practitioner shall request management to provide a written representation that management has fulfilled its responsibilities described in the agreed terms of engagement. The written representation shall include that: (Ref: Para. A106–A108)

1. Management has fulfilled its responsibility for the preparation of financial statements in accordance with the applicable financial reporting framework, including where relevant their fair presentation, and has provided the assurance practitioner with all relevant information and access to information as agreed in the terms of the engagement; and
2. All transactions have been recorded and are reflected in the financial statements.

If law or regulation requires management to make written public statements about its responsibilities, and the assurance practitioner determines that such statements provide some or all of the representations required by subparagraphs (a)–(b), the relevant matters covered by such statements need not be included in the written representation.

The assurance practitioner shall also request management’s written representations that management has disclosed to the assurance practitioner: (Ref: Para. A107)

1. The identity of the entity’s related parties and all the related party relationships and transactions of which management is aware;
2. Significant facts relating to any frauds or suspected frauds known to management that may have affected the entity;
3. Known actual or possible non-compliance with laws and regulations for which the effects of non-compliance affect the entity’s financial statements;
4. All information relevant to use of the going concern assumption in the financial statements;
5. That all events occurring subsequent to the date of the financial statements and for which the applicable financial reporting framework requires adjustment or disclosure, have been adjusted or disclosed;
6. Material commitments, contractual obligations or contingencies that have affected or may affect the entity’s financial statements, including disclosures; and
7. Material non-monetary transactions or transactions for no consideration undertaken by the entity in the financial reporting period under consideration.

If management does not provide one or more of the requested written representations, the assurance practitioner shall: (Ref: Para. A106)

1. Discuss the matter with management and those charged with governance, as appropriate;
2. Re-evaluate the integrity of management, and evaluate the effect that this may have on the reliability of representations (oral or written) and evidence in general; and
3. Take appropriate actions, including determining the possible effect on the conclusion in the assurance practitioner’s report in accordance with this ASRE.

The assurance practitioner shall disclaim a conclusion on the financial statements, or withdraw from the engagement if withdrawal is possible under applicable law or regulation, as appropriate, if:

1. The assurance practitioner concludes that there is sufficient doubt about the integrity of management such that the written representations are not reliable; or
2. Management does not provide the required representations required by paragraph 61.

Date of and Period(s) Covered by Written Representations

The date of the written representations shall be as near as practicable to, but not after, the date of the assurance practitioner’s report.  The written representations shall be for all financial statements and period(s) referred to in the assurance practitioner’s report.

The assurance practitioner shall evaluate whether sufficient appropriate evidence has been obtained from the procedures performed and, if not, the assurance practitioner shall perform other procedures judged by the assurance practitioner to be necessary in the circumstances to be able to form a conclusion on the financial statements. (Ref: Para. A109)

If the assurance practitioner is not able to obtain sufficient appropriate evidence to form a conclusion, the assurance practitioner shall discuss with management and those charged with governance, as appropriate, the effects such limitations have on the scope of the review. (Ref: Para. A110–A111)

Evaluating the Effect on the Assurance Practitioner’s Report

The assurance practitioner shall evaluate the evidence obtained from the procedures performed to determine the effect on the assurance practitioner’s report. (Ref: Para. A109)

Consideration of the Applicable Financial Reporting Framework in Relation to the Financial Statements

In forming the conclusion on the financial statements, the assurance practitioner shall:

1. Evaluate whether the financial statements adequately refer to, or describe, the applicable financial reporting framework; (Ref: Para. A112–A113)
2. Consider whether, in the context of the requirements of the applicable financial reporting framework and the results of procedures performed:
   1. The terminology used in the financial statements, including the title of each financial statement, is appropriate;
   2. The financial statements adequately disclose the significant accounting policies selected and applied;
   3. The accounting policies selected and applied are consistent with the applicable financial reporting framework and are appropriate;
   4. Accounting estimates made by management appear reasonable;
   5. The information presented in the financial statements appears relevant, reliable, comparable, and understandable; and
   6. The financial statements provide adequate disclosures to enable the intended users to understand the effects of material transactions and events on the information conveyed in the financial statements. (Ref: Para. A114–A116)

The assurance practitioner shall consider the impact of:

1. Uncorrected misstatements identified during the review, and in the previous year’s review of the entity’s financial statements, on the financial statements as a whole; and
2. Qualitative aspects of the entity’s accounting practices, including indicators of possible bias in management’s judgements. (Ref: Para. A117–A118)

If the financial statements are prepared using a fair presentation framework, the assurance practitioner’s consideration shall also include: (Ref: Para. A115)

1. The overall presentation, structure and content of the financial statements in accordance with the applicable framework; and
2. Whether the financial statements, including the related notes, appear to represent the underlying transactions and events in a manner that achieves fair presentation or gives a true and fair view, as appropriate, in the context of the financial statements as a whole.

Form of the Conclusion

The assurance practitioner’s conclusion on the financial statements, whether unmodified or modified, shall be expressed in the appropriate form in the context of the financial reporting framework applied in the financial statements.

Unmodified Conclusion

The assurance practitioner shall express an unmodified conclusion in the assurance practitioner’s report on the financial statements as a whole when the assurance practitioner has obtained limited assurance to be able to conclude that nothing has come to the assurance practitioner’s attention that causes the assurance practitioner to believe that the financial statements are not prepared, in all material respects, in accordance with the applicable financial reporting framework.

When the assurance practitioner expresses an unmodified conclusion, the assurance practitioner shall, unless otherwise required by law or regulation, use one of the following phrases, as appropriate: (Ref: Para. A119–A120)

1. “Based on our review, nothing has come to our attention that causes us to believe that the financial statements do not present fairly, in all material respects (or do not give a true and fair view), … in accordance with the applicable financial reporting framework,” (for financial statements prepared using a fair presentation framework); or
2. “Based on our review, nothing has come to our attention that causes us to believe that the financial statements are not prepared, in all material respects, in accordance with the applicable financial reporting framework,” (for financial statements prepared using a compliance framework).

Modified Conclusion

The assurance practitioner shall express a modified conclusion in the assurance practitioner’s report on the financial statements as a whole when:

1. The assurance practitioner determines, based on the procedures performed and the evidence obtained, that the financial statements are materially misstated; or
2. The assurance practitioner is unable to obtain sufficient appropriate evidence in relation to one or more items in the financial statements that are material in relation to the financial statements as a whole.

When the assurance practitioner modifies the conclusion expressed on the financial statements, the assurance practitioner shall:

1. Use the heading “Qualified Conclusion,” “Adverse Conclusion” or “Disclaimer of Conclusion,” as appropriate, for the conclusion paragraph in the assurance practitioner’s report; and
2. Provide a description of the matter giving rise to the modification, under an appropriate heading (for example, “Basis for Qualified Conclusion,” “Basis for Adverse Conclusion” or “Basis for Disclaimer of Conclusion,” as appropriate), in a separate paragraph in the assurance practitioner’s report immediately before the conclusion paragraph (referred to as the basis for conclusion paragraph).

Financial statements are materially misstated

If the assurance practitioner determines that the financial statements are materially misstated, the assurance practitioner shall express:

1. A qualified conclusion, when the assurance practitioner concludes that the effects of the matter(s) giving rise to the modification are material, but not pervasive to the financial statements; or
2. An adverse conclusion, when the effects of the matter(s) giving rise to the modification are both material and pervasive to the financial statements.

When the assurance practitioner expresses a qualified conclusion on the financial statements because of a material misstatement, the assurance practitioner shall, unless otherwise required by law or regulation, use one of the following phrases, as appropriate:

1. “Based on our review, except for the effects of the matter(s) described in the Basis for Qualified Conclusion paragraph, nothing has come to our attention that causes us to believe that the financial statements do not present fairly, in all material respects (or do not give a true and fair view), … in accordance with the applicable financial reporting framework,” (for financial statements prepared using a fair presentation framework); or
2. “Based on our review, except for the effects of the matter(s) described in the Basis for Qualified Conclusion paragraph, nothing has come to our attention that causes us to believe that the financial statements are not prepared, in all material respects, in accordance with the applicable financial reporting framework,” (for financial statements prepared using a compliance framework).

When the assurance practitioner expresses an adverse conclusion on the financial statements, the assurance practitioner shall, unless otherwise required by law or regulation, use one of the following phrases, as appropriate:

1. “Based on our review, due to the significance of the matter(s) described in the Basis for Adverse Conclusion paragraph, the financial statements do not present fairly, in all material respects (or do not give a true and fair view), … in accordance with the applicable financial reporting framework,” (for financial statements prepared using a fair presentation framework); or
2. “Based on our review, due to the significance of the matter(s) described in the Basis for Adverse Conclusion paragraph, the financial statements are not prepared, in all material respects, in accordance with the applicable financial reporting framework,” (for financial statements prepared using a compliance framework).

In the basis for conclusion paragraph, in relation to material misstatements that give rise to either a qualified conclusion or an adverse conclusion, the assurance practitioner shall:

1. Describe and quantify the financial effects of the misstatement if the material misstatement relates to specific amounts in the financial statements (including quantitative disclosures), unless impracticable, in which case the assurance practitioner shall so state;
2. Explain how disclosures are misstated if the material misstatement relates to narrative disclosures; or
3. Describe the nature of omitted information if the material misstatement relates to the non-disclosure of information required to be disclosed. Unless prohibited by law or regulation, the assurance practitioner shall include the omitted disclosures where practicable to do so.

Inability to obtain sufficient appropriate evidence

If the assurance practitioner is unable to form a conclusion on the financial statements due to inability to obtain sufficient appropriate evidence, the assurance practitioner shall:

1. Express a qualified conclusion if the assurance practitioner concludes that the possible effects on the financial statements of undetected misstatements, if any, could be material but not pervasive; or
2. Disclaim a conclusion if the assurance practitioner concludes that the possible effects on the financial statements of undetected misstatements, if any, could be both material and pervasive.

The assurance practitioner shall withdraw from the engagement if the following conditions are present: (Ref: Para. A121–A123)

1. Due to a limitation on the scope of the review imposed by management after the assurance practitioner has accepted the engagement, the assurance practitioner is unable to obtain sufficient appropriate evidence to form a conclusion on the financial statements;
2. The assurance practitioner has determined that the possible effects on the financial statements of undetected misstatements are material and pervasive; and
3. Withdrawal is possible under applicable law or regulation.

When the assurance practitioner expresses a qualified conclusion on the financial statements due to inability to obtain sufficient appropriate evidence, the assurance practitioner shall, unless otherwise required by law or regulation, use one of the following phrases, as appropriate:

1. “Based on our review, except for the possible effects of the matter(s) described in the Basis for Qualified Conclusion paragraph, nothing has come to our attention that causes us to believe that the financial statements do not present fairly, in all material respects (or do not give a true and fair view), … in accordance with the applicable financial reporting framework,” (for financial statements prepared using a fair presentation framework); or
2. “Based on our review, except for the possible effects of the matter(s) described in the Basis for Qualified Conclusion paragraph, nothing has come to our attention that causes us to believe that the financial statements are not prepared, in all material respects, in accordance with the applicable financial reporting framework,” (for financial statements prepared using a compliance framework).

When disclaiming a conclusion on the financial statements the assurance practitioner shall state in the conclusion paragraph that:

1. Due to the significance of the matter(s) described in the Basis for Disclaimer of Conclusion paragraph, the assurance practitioner is unable to obtain sufficient appropriate evidence to form a conclusion on the financial statements; and
2. Accordingly, the assurance practitioner does not express a conclusion on the financial statements.

In the basis for conclusion paragraph, in relation to either the qualified conclusion due to inability to obtain sufficient appropriate evidence or when the assurance practitioner disclaims a conclusion, the assurance practitioner shall include the reason(s) for the inability to obtain sufficient appropriate evidence.

The assurance practitioner’s report for the review engagement shall be in writing, and shall contain the following elements: (Ref: Para. A124–A127, A148, A150)

1. A title, which shall clearly indicate that it is the report of an independent assurance practitioner for a review engagement;
2. The addressee(s), as required by the circumstances of the engagement;
3. An introductory paragraph that:
   1. Identifies the financial statements reviewed, including identification of the title of each of the statements contained in the set of financial statements and the date and period covered by each financial statement;
   2. Refers to the summary of significant accounting policies and other explanatory information; and
   3. States that the financial statements have been reviewed;
4. A description of the responsibility of management for the preparation of the financial statements, including an explanation that management is responsible for: (Ref: Para. A128–A131)
   1. Their preparation in accordance with the applicable financial reporting framework including, where relevant, their fair presentation;
   2. Such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error;
5. If the financial statements are special purpose financial statements:
   1. A description of the purpose for which the financial statements are prepared and, if necessary, the intended users, or reference to a note in the special purpose financial statements that contains that information; and
   2. If management has a choice of financial reporting frameworks in the preparation of such financial statements, a reference within the explanation of management’s responsibility for the financial statements to management’s responsibility for determining that the applicable financial reporting framework is acceptable in the circumstances;
6. A description of the assurance practitioner’s responsibility to express a conclusion on the financial statements including reference to this ASRE and, where relevant, applicable law or regulation; (Ref: Para. A132–A133, A149)
7. A description of a review of financial statements and its limitations, and the following statements: (Ref: Para. A134)
   1. A review engagement under this ASRE is a limited assurance engagement;
   2. The assurance practitioner performs procedures, primarily consisting of making enquiries of management and others within the entity, as appropriate, and applying analytical procedures, and evaluates the evidence obtained; and
   3. The procedures performed in a review are substantially less than those performed in an audit conducted in accordance with Australian Auditing Standards, and, accordingly, the assurance practitioner does not express an audit opinion on the financial statements;
8. A paragraph under the heading “Conclusion” that contains:
   1. The assurance practitioner’s conclusion on the financial statements as a whole in accordance with paragraphs 72–85, as appropriate; and
   2. A reference to the applicable financial reporting framework used to prepare the financial statements, including, if applicable, identification of the jurisdiction of origin of the financial reporting framework-; (Ref: Para. A135–A136)
9. When the assurance practitioner’s conclusion on the financial statements is modified:
   1. A paragraph under the appropriate heading that contains the assurance practitioner’s modified conclusion in accordance with paragraphs 72 and 75–85, as appropriate; and
   2. A paragraph, under an appropriate heading, that provides a description of the matter(s) giving rise to the modification; (Ref: Para. A137)
10. A reference to the assurance practitioner’s obligation under this ASRE to comply with relevant ethical requirements;
11. The date of the assurance practitioner’s report; (Ref: Para. A144–A147)
12. The assurance practitioner’s signature; and (Ref: Para. A138)
13. The location in the jurisdiction where the assurance practitioner practices.

Emphasis of Matter and Other Matter Paragraphs in the Assurance Practitioner’s Report

Emphasis of Matter Paragraphs

The assurance practitioner may consider it necessary to draw users’ attention to a matter presented or disclosed in the financial statements that, in the assurance practitioner’s judgement, is of such importance that it is fundamental to users’ understanding of the financial statements.  In such cases, the assurance practitioner shall include an Emphasis of Matter paragraph in the assurance practitioner’s report, provided the assurance practitioner has obtained sufficient appropriate evidence to conclude that the matter is not likely to be materially misstated as presented in the financial statements.  Such paragraph shall refer only to information presented or disclosed in the financial statements.

If adequate disclosure is made in the financial report, the assurance practitioner shall add an Emphasis of Matter paragraph to the assurance practitioner’s report, to highlight a material uncertainty, including one or more material uncertainties relating to an event(s) or condition(s) that may cast significant doubt on the entity’s ability to continue as a going concern.

The assurance practitioner’s report on special purpose financial statements shall include an Emphasis of Matter paragraph alerting users of the assurance practitioner’s report that the financial statements are prepared in accordance with a special purpose framework and that, as a result, the financial statements may not be suitable for another purpose. (Ref: Para. A139–A140)

The assurance practitioner shall include an Emphasis of Matter paragraph immediately after the paragraph that contains the assurance practitioner’s conclusion on the financial statements under the heading “Emphasis of Matter,” or other appropriate heading.

Other Matter Paragraphs

If the assurance practitioner considers it necessary to communicate a matter other than those that are presented or disclosed in the financial statements that, in the assurance practitioner’s judgement, is relevant to users’ understanding of the review, the assurance practitioner’s responsibilities or the assurance practitioner’s report and this is not prohibited by law or regulation, the assurance practitioner shall do so in a paragraph in the assurance practitioner’s report with the heading “Other Matter” or other appropriate heading.

Other Reporting Responsibilities

An assurance practitioner may be requested to address other reporting responsibilities in the assurance practitioner’s report on the financial statements that are in addition to the assurance practitioner’s responsibilities under this ASRE to report on the financial statements.  In such situations, those other reporting responsibilities shall be addressed by the assurance practitioner in a separate section in the assurance practitioner’s report headed “Report on Other Legal and Regulatory Requirements,” or otherwise as appropriate to the content of the section, following the section of the report headed “Report on the Financial Statements.” (Ref: Para. A141–A143)

Date of the Assurance Practitioner’s Report

The assurance practitioner shall date the report no earlier than the date on which the assurance practitioner has obtained sufficient appropriate evidence as the basis for the assurance practitioner’s conclusion on the financial statements, including being satisfied that: (Ref: Para. A144–A147)

1. All the statements that comprise the financial statements under the applicable financial reporting framework, including the related notes where applicable, have been prepared; and
2. Those with the recognised authority have asserted that they have taken responsibility for those financial statements.

The assurance practitioner’s report shall be dated as at the date the assurance practitioner signs that report.

The preparation of documentation for the review provides evidence that the review was performed in accordance with this ASRE, and legal and regulatory requirements where relevant, and a sufficient and appropriate record of the basis for the assurance practitioner’s report. The assurance practitioner shall document the following aspects of the engagement in a timely manner, sufficient to enable an experienced assurance practitioner, having no previous connection with the engagement, to understand: (Ref: Para. A151)

1. The nature, timing, and extent of the procedures performed to comply with this ASRE and applicable legal and regulatory requirements;
2. Results obtained from the procedures, and the assurance practitioner’s conclusions formed on the basis of those results; and
3. Significant matters arising during the engagement, the assurance practitioner’s conclusions reached thereon, and significant professional judgements made in reaching those conclusions.

In documenting the nature, timing and extent of procedures performed as required in this ASRE, the assurance practitioner shall record

1. Who performed the work and the date such work was completed; and
2. Who reviewed the work performed for the purpose of quality management for the engagement, and the date and extent of the review.

The assurance practitioner shall also document discussions with management, those charged with governance, and others as relevant to the performance of the review of significant matters arising during the engagement, including the nature of those matters.

If, in the course of the engagement, the assurance practitioner identifies information that is inconsistent with the assurance practitioner’s findings regarding significant matters affecting the financial statements, the assurance practitioner shall document how the inconsistency was addressed.