Advanced Audit and Assurance (International) · Audit-related and assurance services

Review Engagements: ISRE 2400 and ISRE 2410 for ACCA AAA

Updated 11 October 2026 · Fact-checked

A review engagement gives limited assurance on historical financial information. The practitioner mainly uses enquiry and analytical procedures, not full testing. The conclusion is negative: nothing has come to our attention that suggests the statements are materially misstated. ISRE 2400 covers reviews by a non-auditor; ISRE 2410 covers interim information reviewed by the entity's auditor.

Understand Review Engagements (ISRE 2400 and 2410)

A review is an assurance engagement that sits below an audit. An audit gives reasonable assurance, which is high but not absolute. A review gives limited assurance, which is a meaningful level but lower. The practitioner does less work, so the risk of giving a wrong conclusion is higher.

Two standards apply. ISRE 2400 (Revised) covers reviews of historical financial statements performed by a practitioner who is not the entity's auditor. ISRE 2410 covers review of interim financial information performed by the independent auditor of the entity. Know which standard fits the scenario. The question usually gives the clue: is the reviewer also the auditor?

The work is mainly enquiry and analytical procedures. You understand the entity, assess where material misstatement is likely, and design procedures to address those areas. You do not normally test controls or do detailed substantive testing such as confirmations or inventory counts. If you find something that looks wrong, you extend procedures until you can conclude.

The conclusion is worded in the negative form: nothing has come to our attention. This is not a statement that the statements are true and fair. It only says you found no reason to think they are materially misstated, based on limited work. For this reason, a review report must make clear what was done and the limits of the work.

Reviews suit smaller entities that are exempt from audit, lenders who want some comfort, and interim reporting. They are cheaper and quicker than audits. The risk is the expectation gap: users may read a review as an audit. Clear engagement terms and clear report wording reduce that risk.

Key rules to remember

Assurance levels: Audit = reasonable assurance (positive opinion); Review = limited assurance (negative conclusion); Both are assurance engagements. The difference is the level of risk accepted and the work done.
Negative assurance wording: "Based on our review, nothing has come to our attention that causes us to believe that the financial statements do not give a true and fair view / are not prepared, in all material respects, in accordance with [framework]."; Use the framework and fair presentation wording that matches the engagement. Do not say "in our opinion".
Main procedures: Enquiry + analytical procedures (+ further procedures if matters arise); No testing of controls and no detailed substantive procedures as a rule.
Choice of standard: Historical financial statements reviewed by a practitioner who is not the entity's auditor → ISRE 2400 (Revised); interim financial information reviewed by the entity's independent auditor → ISRE 2410; Check who the practitioner is and what is being reviewed in the scenario.
Modified conclusion: Material misstatement → qualified or adverse conclusion; inability to obtain evidence → qualified conclusion or disclaimer; management-imposed limitation → ask for removal, and if refused, disclaim a conclusion or withdraw where practicable; Pervasiveness decides between qualified and adverse or disclaimer. A limitation imposed by management is treated more strictly than evidence that is simply unavailable.

How to solve Review Engagements (ISRE 2400 and 2410) questions

Use this method for any question on review engagements, whether it asks you to compare, plan, perform or report.

1Identify who the practitioner is and what is being reviewed. This tells you whether ISRE 2400 or ISRE 2410 applies.
2Confirm the engagement is suitable: acceptance, ethics, competence and agreed terms in an engagement letter that states limited assurance.
3State the level of assurance: limited, with a negative conclusion, compared with reasonable assurance and a positive opinion in an audit.
4Link procedures to the scenario: enquiries of management, analytical procedures on the figures given, and extra work where something looks odd.
5Evaluate what you find. Decide if any misstatement is material and whether you can obtain enough evidence.
6Choose the conclusion: unmodified, qualified, adverse or disclaimer, and give the reason.
7Write the conclusion in negative form if needed, and add the limits of the work and any restrictions on use.
8Apply to the scenario with a clear recommendation, showing scepticism and commercial awareness.

Quickest way: Four-line review answer

When to use it: When time is short and the requirement is a short compare, explain or conclude question.

Say: limited assurance, negative conclusion.
Say: work is mainly enquiry and analytical procedures.
Name the standard that fits the scenario: ISRE 2400 or ISRE 2410.
Give the scenario-specific point: the figure, the risk or the report modification that matters most.

Common mistakes in Review Engagements (ISRE 2400 and 2410)

Saying a review gives no assurance.
Students link assurance only to audits.
Fix: A review is an assurance engagement with limited assurance. Compilation (ISRS 4410) and agreed-upon procedures (ISRS 4400) engagements provide no assurance.
Writing a positive opinion such as "in our opinion the statements give a true and fair view" in a review report.
Students copy audit report wording.
Fix: Use the negative form: nothing has come to our attention that causes us to believe the statements are materially misstated.
Mixing up ISRE 2400 and ISRE 2410.
The numbers look alike and both deal with reviews.
Fix: Ask who the reviewer is and what is being reviewed. The entity's own auditor reviewing interim financial information uses ISRE 2410. A practitioner who is not the entity's auditor reviewing historical financial statements uses ISRE 2400.
Listing audit procedures like inventory counts and confirmations as standard review work.
Students default to audit procedures.
Fix: Stay with enquiry and analytical procedures. Add further procedures only where a matter suggests possible material misstatement.
Saying the review conclusion means the statements are correct.
Students overlook the lower level of assurance.
Fix: Explain that the conclusion only reports that nothing came to attention, based on limited work, and that undetected misstatements may exist.
Forgetting that a review conclusion can be modified.
Students think only audit reports can be qualified.
Fix: State that a material misstatement leads to a qualified or adverse conclusion, and a limitation on scope leads to a qualified conclusion or disclaimer, depending on materiality and pervasiveness. If management imposes the limitation, ask for it to be removed. If it is not, disclaim a conclusion or withdraw where practicable.

Worked examples

Example 1

Explain the differences between an audit and a review engagement, for a client that asks why your review fee is much lower than last year's audit fee. (6 marks)

Show the solution

Level of assurance: an audit gives reasonable assurance; a review gives limited assurance.
Conclusion: an audit gives a positive opinion; a review gives a negative form conclusion.
Procedures: an audit needs risk assessment, controls understanding, substantive testing and external evidence; a review relies mainly on enquiry and analytical procedures.
Evidence needed: much less in a review, so fewer staff hours and a lower fee.
Risk: the chance of an undetected material misstatement is higher in a review.
Users: they should understand that a review is not an audit, to limit the expectation gap.

Answer: The fee is lower because a review involves limited assurance and less work, mainly enquiry and analytical procedures, instead of the full testing in an audit. The conclusion is negative, and users get less comfort than from an audit opinion.

Example 2

You have reviewed the annual financial statements of Karan Ltd under ISRE 2400. Revenue has risen sharply but receivables have not. Management explained that sales were mostly cash. You have no evidence to support the explanation. Other areas are fine. Explain what you do and the effect on your conclusion.

Show the solution

Recognise the inconsistency: revenue up, receivables flat. Management's explanation is not enough to remove the doubt.
Apply scepticism: extend procedures, such as comparing cash sales with bank records and reviewing sales cut-off.
Evaluate the result. If the extra procedures support the explanation, the conclusion can be unmodified.
If management refuses access to the records, this is a management-imposed limitation. Ask management to remove it.
If management still refuses, disclaim a conclusion or withdraw from the engagement where practicable. Do not simply qualify.
If the evidence is unavailable for other reasons and the possible effects are material but not pervasive, give a qualified conclusion on that matter and explain the basis in the report.
If the evidence shows revenue is overstated and material, give a qualified or adverse conclusion, depending on pervasiveness.
If the possible effects of an evidence limitation are material and pervasive, disclaim a conclusion.

Answer: Extend procedures. If evidence supports management, give an unmodified negative conclusion. If management refuses access, ask for the limitation to be removed and, if it is not, disclaim a conclusion or withdraw where practicable. If evidence is unavailable for other reasons, qualify for a material but not pervasive matter and disclaim if the effect is pervasive. If revenue is shown to be materially overstated, give a qualified or adverse conclusion depending on pervasiveness.

Exam tips

Always state both the level of assurance and the form of conclusion when comparing a review with an audit.
Tie your procedures to the figures in the scenario. Generic lists of enquiries score poorly.
Learn the negative assurance wording until you can write it without help, and use the framework named in the scenario.
Show professional scepticism: management's explanation alone is not evidence, even in a review.
Mention the expectation gap when the client or user may confuse a review with an audit.

Practice questions from Audit-related and assurance services

Review Engagements (ISRE 2400 and 2410): frequently asked questions

What is the difference between ISRE 2400 and ISRE 2410?

ISRE 2400 (Revised) applies to reviews of historical financial statements by a practitioner who is not the entity's auditor. ISRE 2410 applies when the entity's own independent auditor reviews interim financial information. Both give limited assurance.

What is negative assurance?

It is the form of conclusion in a review. The practitioner states that nothing has come to their attention that suggests the statements are materially misstated. It is not a positive opinion that the statements are true and fair.

Can a review conclusion be modified?

Yes. A material misstatement can lead to a qualified or adverse conclusion. A scope limitation can lead to a qualified conclusion or a disclaimer, depending on how material and pervasive the matter is. If management imposes the limitation, the practitioner asks for it to be removed and, if it is not, disclaims a conclusion or withdraws where practicable.

What procedures are used in a review engagement?

Mainly enquiries of management and analytical procedures. If something suggests the statements may be materially misstated, you do further procedures until you can reach a conclusion.