TWSRE2410 Review of Financial Information Performed by the Independent Auditor of the Entity

Status

Revised by Auditing Standards Committee in Taiwan on 4 October, 2022

Summary

The purpose of this Standard is to establish standards and provide guidance on the auditor’s professional responsibilities when the auditor undertakes an engagement to review financial information of a client, and on the form and content of the report.

The objective of an engagement to review financial information is to enable the auditor to express a conclusion whether, on the basis of the review, anything has come to the auditor’s attention that causes the auditor to believe that the financial information is not prepared, in all material respects, in accordance with an applicable financial reporting framework. The auditor makes inquiries, and performs analytical and other review procedures in order to reduce to a moderate level the risk of expressing an inappropriate conclusion when the financial information is materially misstated.

In conducting a review, the auditor should:

(a) have an understanding of the entity and its environment, including its internal control, as it relates to the preparation of financial information, sufficient to plan and conduct the engagement.

(b) make inquiries, primarily of persons responsible for financial and accounting matters, and perform analytical and other review procedures to enable the auditor to conclude whether anything has come to the auditor’s attention that causes the auditor to believe that the financial information is not prepared, in all material respects, in accordance with the applicable financial reporting framework.

(c) inquire whether management has identified all events up to the date of the review report that may require adjustment to or disclosure in the financial information, and whether management has changed its assessment of the entity’s ability to continue as a going concern.

(d) make additional inquiries or perform other procedures to enable the auditor to express a conclusion in the review report when a matter comes to the auditor’s attention that leads the auditor to question whether a material adjustment should be made for the financial information to be prepared, in all material respects, in accordance with the applicable financial reporting framework.

(e) evaluate whether uncorrected misstatements that have come to the auditor’s attention are material to the financial information.

(f) obtain written representation from management.

(g) communicate a matter as soon as practicable to the appropriate level of management when that matter comes to the auditor’s attention that causes the auditor to believe that it is necessary to make a material adjustment to the financial information for it to be prepared, in all material respects, in accordance with the applicable financial reporting framework.

The auditor should express a qualified or adverse conclusion when a matter has come to the auditor’s attention that causes the auditor to believe that a material adjustment should be made to the financial information for it to be prepared, in all material respects, in accordance with the applicable financial reporting framework.

When the auditor is unable to complete the review due to the limitation on the scope, the auditor should communicate, in writing, to the appropriate level of management and to those charged with governance. If the auditor concludes that the possible effects on the financial statements of undetected misstatements, if any, could be material but not pervasive, the auditor shall express a qualified conclusion. If the auditor concludes that the possible effects on the financial statements of undetected misstatements, if any, could be both material and pervasive, the auditor shall withdraw from the engagement or disclaim a conclusion on the financial statements.

Effective date

This Standard is effective from 15 December, 2022.