Review Engagement Reports for fiscal periods ending on or after December 14, 2017 will contain several changes.
What to Expect
The new report identifies that as practitioners, we are required to be independent. It also summarizes management’s responsibility for the financial statements, summarizes our responsibility, and presents our conclusion based on our review.
An example of the new report can be found at this link. In certain circumstances, the reports may include additional paragraphs.
Emphasis of Matter Paragraph
If we consider it necessary to draw the user’s attention to a matter that is fundamental to their understanding of the financial statements, an “Emphasis of Matter” paragraph will be included. This paragraph will refer to the disclosure of the matter in the notes to the financial statements. An example of such a circumstance is when a material uncertainty exists relating to an entity’s ability to operate on a going concern basis. The placement of the paragraph after our conclusion, as well as wording in the paragraph, specifies that our reports are not qualified in respect of the matter discussed.
Other Matter Paragraph
An “Other Matter” paragraph will be included for information that is relevant to the users’ understanding of the review. An example of such a circumstance is when the prior year’s financial statements have not been subject to a review or audit.
Changes to Our Review Procedures
The report changes are part of a revision to the standard we follow when conducting review engagements. As a result of this revision, you may notice some changes to the types of questions or matters discussed during the conduct of our reviews.