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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Reporting on other assignments

Halden & Co is planning a review of Corvid Ltd's financial statements under ISRE 2400 (Revised). Which procedures would the practitioner mainly rely on to obtain limited assurance?

The practitioner mainly relies on enquiries of management and others and analytical procedures, with additional procedures when something suggests possible material misstatement. Extensive audit testing such as confirmations, inventory observation and controls testing is not normally required to reach limited assurance.

  1. AExternal confirmation of receivables, physical inspection of inventory and detailed tests of controls
  2. BEnquiries of management and others, analytical procedures, and further procedures where matters indicate possible misstatementCorrect
  3. CRe-performance of the full year's transactions on a sample basis
  4. DReading the financial statements only, with no evidence-gathering

Explanation

Review procedures are primarily enquiry and analytical procedures, supplemented by additional procedures when matters suggest possible material misstatement. Confirmations, inventory observation and tests of controls are typical of reasonable assurance audits and are not the main basis in a review. Reading alone would not give any assurance.

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