Advanced Auditing, Assurance and Professional Ethics · Review of Financial Information

Review Conclusion and Practitioner's Review Report (SRE 2400)

Updated 5 October 2026 · Fact-checked

A review report under SRE 2400 (Revised) gives a limited assurance conclusion. You say whether anything has come to your attention that makes you believe the financial statements are not prepared, in all material respects, under the framework. To solve a question, judge the evidence, classify any problem as material or pervasive, choose the conclusion, then draft the report elements.

Understand Review Conclusion and Practitioner's Review Report

A review is a limited assurance engagement. You do not give the positive, reasonable-assurance opinion of an audit. You do enough work, mainly inquiries and analytical procedures, to say whether anything has come to your attention that suggests the financial statements are misstated.

That is why the conclusion is worded in the negative form: "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." Nothing in the report says the statements are "true and fair" in the audit sense. The wording must still identify what the financial statements are meant to present, such as the financial position at the reporting date and the performance and cash flows for the period. For the exact requirements, read the evaluation and reporting sections of SRE 2400 (Revised) in your study material.

Before you conclude, step back and evaluate. Have you got sufficient appropriate evidence for limited assurance? Are the uncorrected misstatements, individually or together, material? Are the financial statements adequately described and do they refer to the framework? The answer decides whether your conclusion is unmodified or modified.

A conclusion is modified in two situations. First, the financial statements are materially misstated. Second, you cannot obtain enough evidence (a limitation on scope). Then you ask whether the effect is pervasive. Material but not pervasive gives a qualified conclusion. Material and pervasive misstatement gives an adverse conclusion. Pervasive inability to get evidence leads to withdrawal where practicable, or else a disclaimer.

The written report must be clear about its limits. It states that a review is limited assurance, that procedures are less than an audit, and that no audit opinion is expressed. This is what readers need to understand the level of comfort.

Key rules to remember

Unmodified conclusion (negative form): Nothing has come to attention that causes belief that FS are not prepared, in all material respects, under the applicable framework; Used when evidence is sufficient and there are no material uncorrected misstatements. Limited assurance, so no positive opinion.
Qualified conclusion: Misstatement material but NOT pervasive → "except for the effects of the matter described in the Basis section". Evidence limitation with possible effects material but not pervasive → "except for the possible effects of the matter described in the Basis section"; Use "effects" for a misstatement and "possible effects" for a scope limitation. The report must also include a Basis for Qualified Conclusion section before the conclusion.
Adverse conclusion: Misstatement material AND pervasive → conclusion that FS are not prepared, in all material respects, under the framework; Applies to misstatement, not to a scope limitation. Needs a basis section.
Pervasive limitation of evidence: Evidence not obtainable + possible effects material and pervasive → withdraw where practicable and permitted by law; otherwise disclaim a conclusion; Consider withdrawal first. Disclaimer is the fallback if withdrawal is not practicable before issuing the report. A disclaimer needs a basis section.
Elements of the review report: Title → Addressee → Introductory paragraph → Management's responsibility → Practitioner's responsibility (limited assurance) → Conclusion → Signature, date, place; Add a basis section before the conclusion when it is modified. Emphasis of Matter or Other Matter paragraphs may be added where needed.
Audit vs review: Audit = reasonable assurance, positive opinion; Review = limited assurance, negative-form conclusion; Review procedures are mainly inquiry and analytical procedures, not full audit testing.

How to solve Review Conclusion and Practitioner's Review Report questions

Use this order for any question on the review conclusion or report, whether it asks for a conclusion type or a draft.

1Read the facts and identify what is wrong: a misstatement, a limitation on evidence, or nothing.
2Check materiality of the item alone and together with other uncorrected misstatements.
3Decide if the effect is pervasive. Ask whether it is confined to specific elements or affects the financial statements as a whole.
4Pick the conclusion: unmodified, qualified, adverse, or withdraw/disclaim for a pervasive evidence limitation.
5State the reason in provision-facts-conclusion form: the SRE 2400 requirement, the case facts, then the result.
6Describe the report elements the question asks for, in order: title, addressee, introduction, responsibilities, basis section if modified, conclusion, signature, date, place.
7Add the limited assurance wording and mention that no audit has been performed.
8Close with one line on any Emphasis of Matter or Other Matter paragraph only if the facts call for it.

Quickest way: Two-question decision for the conclusion type

When to use it: Use when a short case asks only which conclusion the practitioner should give.

Question 1: Is the issue a misstatement or a lack of evidence?
Question 2: Is its effect material only, or material and pervasive?
Misstatement + material only = qualified ("except for the effects"). Misstatement + pervasive = adverse.
Lack of evidence + material only = qualified ("except for the possible effects"). Lack of evidence + pervasive = withdraw if practicable, else disclaim.
Write the answer in one line with the reason, then add the basis section point.

Common mistakes in Review Conclusion and Practitioner's Review Report

Writing the review conclusion as a positive opinion, such as "the financial statements give a true and fair view".
Students carry over the audit report wording from SA 700.
Fix: Use the negative form: "nothing has come to our attention that causes us to believe...". Positive assurance belongs to an audit.
Giving an adverse conclusion for a scope limitation.
Students link all serious problems to adverse.
Fix: Adverse applies to material and pervasive misstatement. A pervasive evidence limitation leads to withdrawal where practicable, otherwise a disclaimer.
Skipping the basis section in a modified report.
Students focus on the conclusion wording and forget the supporting section.
Fix: For any qualified, adverse or disclaimed conclusion, include a basis section before the conclusion explaining the matter.
Treating every material item as pervasive.
Students stop at materiality and do not test pervasiveness.
Fix: Ask whether the effect is confined to specific elements or spreads across the financial statements. Only wide effects are pervasive.
Using "except for the effects of" for a qualified conclusion caused by a scope limitation.
Students use one qualified wording for every case.
Fix: For a misstatement, say "except for the effects of". For an evidence limitation, say "except for the possible effects of", because the effect is not known.
Leaving out the limited assurance and no-audit statements in the practitioner's responsibility paragraph.
Students copy only the headings of an audit report.
Fix: State that the review is a limited assurance engagement, procedures are mainly inquiries and analytical procedures, are less than an audit, and no audit opinion is expressed.
Not describing what the financial statements present or identifying each statement reviewed.
Students treat the introductory paragraph as a formality.
Fix: Name the entity, list each statement with its date or period, refer to the significant accounting policies and explanatory information, and describe what the statements are meant to present.

Worked examples

Example 1

Case: A practitioner is engaged to review the financial statements of Kavya Traders Ltd for the year ended 31 March 2027. Profit before tax is ₹50,00,000 and total assets are ₹8,00,00,000. Trade receivables include ₹12,00,000 due from a customer that has been declared insolvent, and management refuses to provide for it. Materiality is ₹2,50,000. All other areas are satisfactory. What conclusion should the practitioner give, and what must the report include?

Show the solution

Identify the issue: a misstatement. Receivables and profit are overstated by ₹12,00,000 because no provision is made.
Test materiality: ₹12,00,000 is well above ₹2,50,000, so it is material. It is also 24% of profit before tax (12,00,000 ÷ 50,00,000).
Test pervasiveness: the effect is confined to receivables and profit. All other areas are satisfactory, so it is not pervasive.
Apply SRE 2400: material but not pervasive misstatement means a qualified conclusion.
Report content: add a Basis for Qualified Conclusion section before the conclusion describing the unprovided ₹12,00,000 and its effect on receivables and profit.
Word the conclusion as "except for the effects of the matter described in the Basis section, 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 framework".
Keep the standard elements: title, addressee, introduction, management's and practitioner's responsibilities with limited assurance wording, signature, date and place.

Answer: Qualified conclusion ("except for the effects of"), supported by a Basis for Qualified Conclusion section on the unprovided ₹12,00,000.

Example 2

Case: During a review of Meera Foods Ltd, management does not allow the practitioner to access any records of its main subsidiary, which accounts for most of the group's revenue and assets. The practitioner cannot perform alternative procedures. The report has not yet been issued. What should the practitioner do?

Show the solution

Identify the issue: a limitation on obtaining evidence, not a misstatement.
Test materiality and pervasiveness: the subsidiary holds most revenue and assets, so possible effects are material and pervasive for the financial statements.
Apply SRE 2400: a pervasive limitation means the practitioner should withdraw from the engagement where practicable and permitted by law or regulation.
If withdrawal is not practicable before issuing the report, disclaim a conclusion.
A disclaimer report would include a basis section describing the limitation, state that the practitioner does not express a conclusion, and carry the usual elements such as title, addressee, signature, date and place.
Do not give an adverse conclusion, because no misstatement has been identified.

Answer: Withdraw from the engagement where practicable. If that is not practicable, issue a disclaimer of conclusion with a basis section describing the access limitation.

Exam tips

Always classify the issue as a misstatement or an evidence limitation first. The route to the conclusion type depends on it.
In written answers, name the pervasiveness test in one line. Markers look for the reason, not just the label.
When asked for the difference between audit and review reports, cover assurance level, form of conclusion, procedures and wording, in four short points.
For format questions, follow the order of elements and mention the basis section whenever the conclusion is modified.
In MCQs, the negative-form conclusion with limited assurance is the signal for a review. Rule out options that use "true and fair" in the review context.

Practice questions from Review of Financial Information

Review Conclusion and Practitioner's Review Report: frequently asked questions

What is the review report format under SRE 2400 (Revised)?

It has a title, addressee, introductory paragraph, management's responsibility, practitioner's responsibility, conclusion, then signature, date and place. A modified report adds a basis section before the conclusion. Emphasis of Matter or Other Matter paragraphs can be added where needed.

What is the difference between an audit report and a review report?

An audit report gives a positive opinion with reasonable assurance after detailed testing. A review report gives a negative-form conclusion with limited assurance, based mainly on inquiries and analytical procedures. The review report also states that no audit has been performed.

When is a review conclusion qualified, adverse or disclaimed?

Qualified applies when a misstatement, or the possible effect of an evidence limitation, is material but not pervasive. Adverse applies when a misstatement is material and pervasive. A pervasive limitation leads to withdrawal where practicable, otherwise a disclaimer.

How should the review conclusion describe what the financial statements present?

The wording should identify what the statements are meant to present under the applicable framework, such as financial position at the reporting date and performance and cash flows for the period. Read the evaluation and reporting requirements of SRE 2400 (Revised) in your study material for the exact treatment.