The International Auditing and Assurance Standards Board (IAASB) released an exposure draft that proposes revisions to International Standard on Review Engagements (ISRE) 2410, Review of Interim Financial Information by the Independent Auditor of the Entity’s Annual Financial Statements.
The exposure draft’s key proposals include a clearer articulation of what an interim review engagement is and how it differs from a financial statement audit, a news release said. Other proposed revisions include enhanced requirements in areas of high public interest, such as going concern, fraud, and noncompliance with laws and regulations.
The proposed revisions, according to the release, represent the first comprehensive review of the standard since its issuance in 2005, reflecting the changes in the global environment and improvements to the audit and assurance model made over the last two decades.
“Interim financial information, such as quarterly and semi-annual reporting, plays an important role for investors,” IAASB Chair Tom Seidenstein said in the release. “These proposals seek to reinforce confidence in interim review engagements by clarifying expectations, strengthening consistency in practice, and improving communication to users.”
Investors and other users are expected to benefit from improved transparency in the auditor’s interim review report. Additional enhancements, the release said, include requirements related to engagement-level quality management, determining materiality for planning and performing an engagement, and group interim review engagements.
Comments are requested by 3 September.
— To comment on this article or to suggest an idea for another article, contact Steph Brown at Stephanie.Brown@aicpa-cima.com.