1. Introduction: What is a "Review" Engagement?
Definition & Conceptual Architecture of a Review
Under the ICAI Framework of Engagement Standards, a "Review" is defined as a limited assurance engagement:
"Limited assurance is the level of assurance obtained where engagement risk is reduced to a level that is acceptable in the circumstances of the engagement, but where that risk is greater than for a reasonable assurance engagement, as the basis for expressing a conclusion."
The combination of the nature, timing, and extent of evidence-gathering procedures is at least sufficient for the practitioner to obtain a meaningful level of assurance. To be meaningful, the level of assurance obtained by the practitioner is likely to enhance the intended users’ confidence about the financial statements.
In Simpler Terms (ICAI Concept): A limited assurance engagement provides a lower level of assurance than an audit. It involves fewer procedures and gathers sufficient appropriate evidence on the basis of which limited conclusions can be drawn up. However, just like an audit, a "review" relates to financial statements prepared on the basis of historical financial information.
Case Story: Madhulika's Dilemma at Track Data Limited
Madhulika, a CA Final student, was part of an engagement team conducting a "Review" of the quarterly results of "Track Data Limited", a listed company. The audit firm she worked with was also the statutory auditor of this company.
It was a brand new assignment for her. She knew about the mandatory review of quarterly financial results of listed companies under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Regulation 33). However, several critical professional questions troubled her mind:
- Scope Dilemma: What is the exact difference between the scope of an audit and a review? Why did the regulator mandate a "Review" rather than a full audit each quarter?
- Procedures Dilemma: Does a review involve the same elaborate testing as an audit? Are procedures limited to reconciling trial balances with accounting records, or do they involve other procedures?
- Evidence & Responsibilities: Does a practitioner gather sufficient and appropriate evidence in a review? Are the professional responsibilities identical to an audit?
- Reporting & Modifications: What happens if misstatements identified during the quarterly review are not corrected by management? Can a reviewer issue a modified conclusion just like an audit opinion?
The Solution: Standards on Review Engagements (SRE 2400 and SRE 2410) clinically prescribe the answers to every single question Madhulika contemplated!
The Standards on Review Engagements (SRE) Suite
ICAI has issued two distinct Standards on Review Engagements based on who performs the review and the nature of financial information:
| Standard | Title & Subject Matter | Practitioner Status & Applicability |
|---|---|---|
| SRE 2400 | Engagements to Review Historical Financial Statements | Applies when the practitioner is NOT the statutory auditor of the entity's financial statements. Covers review of historical financial statements (complete or single, general or special purpose). |
| SRE 2410 | Review of Interim Financial Information Performed by the Independent Auditor of the Entity | Applies exclusively when the review of interim financial information (e.g., quarterly results under SEBI Reg 33) is performed by the INDEPENDENT STATUTORY AUDITOR of the entity. |
Crucial Exam Golden Rule: The watershed dividing line between SRE 2400 and SRE 2410 is whether the reviewer is the statutory auditor of the annual financial statements! If statutory auditor reviews interim results $implies$ SRE 2410 applies. If an independent practitioner who is not the statutory auditor is engaged $implies$ SRE 2400 applies.
2. SRE 2400: Engagements to Review Historical Financial Statements
Scope & Underlying Philosophy of SRE 2400
In a review of financial statements under SRE 2400, the practitioner expresses a conclusion designed to enhance the degree of confidence of intended users regarding the preparation of an entity’s financial statements in accordance with an applicable financial reporting framework.
- Frameworks Covered: The financial statements may be prepared using a general purpose framework (e.g. Schedule III / AS / Ind AS) or a special purpose framework (e.g. cash basis, tax basis, contractual provisions).
- Limited Assurance Basis: The practitioner's conclusion is based on obtaining limited assurance. The report describes the nature of a review engagement as context for readers to understand the conclusion.
- Primary Review Procedures: The practitioner performs primarily INQUIRY and ANALYTICAL PROCEDURES to obtain sufficient appropriate evidence as the basis for a conclusion on the financial statements as a whole.
- Suspected Misstatements: If the practitioner becomes aware of a matter causing belief that the financial statements may be materially misstated, they design and perform additional procedures.
- Non-Auditor Status: SRE 2400 specifically deals with responsibilities when the practitioner is NOT the auditor of the entity's financial statements.
Practitioner’s Dual Objectives under SRE 2400 (Para 2.1)
The practitioner’s objectives in a review under SRE 2400 are:
Objective (a): Obtain Limited Assurance
Obtain limited assurance, primarily by making inquiries and performing analytical procedures, about whether the financial statements as a whole are free from material misstatement, thereby enabling the practitioner to express a conclusion on whether anything has come to their attention that causes them to believe the financial statements are not prepared, in all material respects, in accordance with the applicable framework.
Objective (b): Report & Communicate
Report on the financial statements as a whole and communicate, as required by SRE 2400.
Disclaimer or Withdrawal Rule: In all cases when limited assurance cannot be obtained and a modified conclusion in the practitioner’s report is insufficient in the circumstances, SRE 2400 requires that the practitioner either:
(1) Disclaim a conclusion in the report issued; or
(2) Where appropriate, withdraw from the engagement if withdrawal is possible under applicable law or regulation.
Compliance with Ethical Requirements & Engagement Level QC (Para 2.2 & TYK 9)
Under SRE 2400, the practitioner SHALL COMPLY with relevant ethical requirements:
Independence is Mandatory!
Unlike Related Services (SRS 4400/4410) where independence is exempt, INDEPENDENCE IS STRICTLY MANDATORY for a review engagement under SRE 2400 because a review is an assurance engagement!
Engagement Partner QC Responsibilities
The engagement partner is responsible for the overall quality of each review engagement and that the engagement is conducted in accordance with the firm’s quality control policies under SQC 1.
Factors Precluding Acceptance / Continuance (When Practitioner MUST NOT Accept):
Unless required by law or regulation, the practitioner SHALL NOT ACCEPT a review engagement if:
- No Rational Purpose: The practitioner is not satisfied that there is a rational purpose for the engagement (e.g. significant scope limitation, practitioner suspects client wants to be inappropriately associated with their name).
- Ethical / Independence Compromise: Practitioner has reason to believe that relevant ethical requirements, including independence, will not be satisfied.
- Unavailable / Unreliable Information: Preliminary understanding indicates that information needed to perform the review is likely to be unavailable or unreliable.
- Doubts over Management Integrity: Practitioner has cause to doubt management’s integrity such that it is likely to affect proper performance.
- Scope Limitation Imposed Upfront: Management imposes a limitation on scope such that the practitioner believes it will result in disclaiming a conclusion on the financial statements.
Preconditions for Accepting a Review Engagement (Para 2.3 & TYK 10)
Prior to accepting a review engagement, the practitioner shall establish that the preconditions are present:
| Precondition Element | Practitioner’s Mandatory Verification Duty |
|---|---|
| 1. Acceptable Framework | Determine whether the financial reporting framework applied is acceptable. In the case of special purpose financial statements, obtain an understanding of the purpose for which they are prepared and the intended users. |
| 2. Management Responsibility: Financial Statements | Obtain agreement of management that it acknowledges and understands its responsibility for the preparation of the financial statements in accordance with the applicable framework, including fair presentation. |
| 3. Management Responsibility: Internal Control | Agreement of management acknowledging responsibility for such internal control as management determines necessary to enable preparation of financial statements free from material misstatement from fraud or error. |
| 4. Unrestricted Access |
Agreement of management to provide the practitioner with:
• Access to all information relevant to preparation of financial statements (records, documentation); • Additional information requested by the practitioner; and • Unrestricted access to persons within the entity from whom evidence is necessary. |
Remedial Protocol if Preconditions Missing: Discuss with management or TCWG. If changes cannot satisfy the practitioner, DO NOT ACCEPT the engagement (unless required by law). If required by law, an engagement under non-compliant circumstances does not comply with SRE 2400, and the practitioner shall NOT include any reference to SRE 2400 in the report! If discovered after acceptance, determine whether the matter can be resolved, whether to continue, and how to communicate in the report.
Scenario: Roma Limited & Dorma Limited (Contractual Quarterly Review)
Roma Limited has entered into a contract with Dorma Limited. There is a specific condition in the contract by virtue of which Roma Limited is required to get its financial statements reviewed for a year on a quarterly basis in accordance with the financial reporting provisions of the contract.
ICAI Model Answer:
Yes, Roma Limited can lawfully get its financial statements reviewed by a professional accountant in practice under SRE 2400.
Legal & Standard Rationale:
The financial statements in this scenario are prepared in accordance with a special purpose framework (i.e., the financial reporting provisions stipulated in the contract between Roma Limited and Dorma Limited).
As per SRE 2400, financial statements prepared in accordance with a special purpose framework can validly be reviewed by a professional accountant in practice, and a review report expressing limited assurance may be issued in accordance with SRE 2400 (incorporating an explanatory paragraph alerting users to the special purpose nature).
Agreeing Terms of Engagement & Recurring Reviews (Para 2.4)
The practitioner shall agree upon the terms in an engagement letter or other written agreement prior to performance:
- Mandatory Terms: Objective and scope of review, responsibilities of practitioner, responsibilities of management (preparation, internal control, access), applicable financial reporting framework, expected form and content of report.
- Recurring Reviews: The practitioner shall evaluate whether circumstances require terms to be revised and whether there is a need to remind management of existing terms.
- Mid-Way Change in Engagement Terms: The practitioner shall NOT agree to a change in terms where there is no reasonable justification. If requested to change from review to non-assurance (compilation/agreed-upon procedures), determine whether reasonable justification exists. If terms change, record new terms in a revised engagement letter.
Performing the SRE 2400 Review: Materiality, Inquiry & Analytical Procedures
1. Materiality in a Review of Financial Statements (Para 2.4(i))
The practitioner shall determine materiality for the financial statements as a whole and apply this materiality in designing the review procedures and evaluating the results obtained.
Crucial Concept (ICAI Exam Rule): The practitioner’s judgment about what is material in relation to the financial statements as a whole is THE SAME regardless of the level of assurance obtained!
Materiality is based on the information needs of intended users, not on the assurance level. The practitioner shall revise materiality for the financial statements as a whole if new information becomes available during the review that would have caused an initial different determination.
2. Obtaining Understanding of the Entity (Para 2.4(ii))
The practitioner shall obtain an understanding of:
- The entity’s business and operations, accounting systems, and accounting records; and
- The applicable financial reporting framework, including its application in the entity’s industry,
to identify areas in the financial statements where material misstatements are likely to arise and thereby provide a targeted basis for designing review procedures.
3. Designing & Performing Core Review Procedures (Para 2.4(iii))
In obtaining sufficient appropriate evidence as the basis for expressing limited assurance, the practitioner designs and performs primarily INQUIRY and ANALYTICAL PROCEDURES:
(A) Inquiry as a Review Procedure (TYK 1 & 7)
Inquiry involves seeking information of knowledgeable persons inside or outside the entity. It is fundamental to a review because:
- Understand Management Judgments: Inquiring into accounting policies, revenue recognition methods, and significant accounting estimates.
- Unrecorded Liabilities & Contingencies: Inquiring about subsequent events, pending litigation, or claims.
- Disclose Related Parties: Identifying relationships and unusual transactions.
- Internal Controls & Fraud: Inquiring into internal control changes, known or suspected fraud, and compliance with laws.
(B) Analytical Procedures in a Review (TYK 13)
Analytical procedures consist of evaluating financial information through analysis of plausible relationships among both financial and non-financial data:
- Comparative Analysis: Comparing current figures with prior comparable periods.
- Anticipated Results: Comparing with budgets, forecasts, and expectations.
- Plausible Ratios: Analyzing gross margins, inventory turnover, debtor days against industry benchmarks.
- Assists Practitioner in: Identifying unusual fluctuations, inconsistencies, and corroborating management's oral inquiries.
4. Procedures Addressing Specific Circumstances (Para 2.4(iv))
SRE 2400 mandates targeted procedures when addressing four critical risk areas:
| Specific Risk Area | Practitioner’s Mandatory Procedures under SRE 2400 |
|---|---|
| Related Parties | Inquire about the identity of related parties, the nature of relationships, and whether any transactions occurred. Inquire whether all related party relationships and transactions have been appropriately accounted for and disclosed in accordance with the applicable framework. |
| Fraud & Non-Compliance with Laws |
Inquire of management regarding:
(a) Management’s assessment of the risk of material misstatement due to fraud; (b) Any known, suspected, or alleged fraud affecting the entity; (c) Any known or suspected non-compliance with laws and regulations. Consider the effect on the review conclusion and determine whether external reporting is legally required. |
| Going Concern (TYK 5) |
If the practitioner becomes aware of events or conditions casting significant doubt on the entity’s ability to continue as a going concern, the practitioner shall:
1. Inquire of management regarding plans for future actions affecting going concern, their feasibility, and management's belief on outcome; 2. Evaluate results of inquiries to consider whether management's responses provide a sufficient basis to continue on going concern basis, or conclude whether statements are materially misstated/misleading; 3. Consider management's responses in light of all relevant information obtained during the review. |
| Use of Work Performed by Others / Group Reviews | If using work performed by other practitioners or experts, take appropriate steps to be satisfied that their work is adequate for the review purposes. For group reviews, direct procedures to achieve review objectives in the context of group financial statements. |
5. Additional Procedures when Suspecting Material Misstatements (Para 2.4(v) & TYU 2)
If the practitioner becomes aware of matters causing belief that the financial statements may be materially misstated, the practitioner SHALL DESIGN AND PERFORM ADDITIONAL PROCEDURES sufficient to enable the practitioner to:
Objective (a): Clear the Doubt
Conclude that the matter(s) is NOT likely to cause the financial statements as a whole to be materially misstated; OR
Objective (b): Confirm Misstatement
Determine that the matter(s) DOES cause the financial statements as a whole to be materially misstated.
Nature of Additional Procedures:
- Focused Inquiry or Analytics: Performed in greater detail or focused on affected accounts, balances, or disclosures.
- Substantive Procedures / Tests of Details: Examining source invoices, contracts, or bank statements.
- External Confirmations: Direct written confirmation from customers, suppliers, or lenders.
The Past-Due Debtors Scenario (ICAI Text): Analysis of receivables shows material past-due balances without allowance for bad debts $implies$ Inquire of management regarding impairment $implies$ If management explanation is insufficient, perform additional procedures (e.g. examine subsequent collections after balance sheet date) $implies$ If still unable to conclude whether misstated or not, a scope limitation exists, precluding an unmodified conclusion!
Scenario: Suspected Material Misstatement Gathered Upon Inquiry
You are conducting a review of the financial statements of a company under SRE 2400. It is gathered upon inquiry that there is a possibility of material misstatements in the financial statements.
ICAI Model Answer:
Under SRE 2400, if the practitioner becomes aware of matters causing belief that the financial statements may be materially misstated, the practitioner shall design and perform additional procedures sufficient to enable them to:
- Conclude: That the matter(s) is not likely to cause the financial statements as a whole to be materially misstated; OR
- Determine: That the matter(s) causes the financial statements as a whole to be materially misstated.
Nature of Additional Procedures:
• Additional inquiry or analytical procedures performed in greater detail focused on affected items; or
• Other types of procedures, such as substantive tests of details or external confirmations.
If additional procedures resolve the doubt, proceed accordingly. If the practitioner is unable to obtain sufficient appropriate evidence to conclude either way, a limitation on scope exists, requiring a qualified conclusion or disclaimer of conclusion.
6. Subsequent Events & Written Representations (Para 2.4(vi) & TYK 14)
A. Subsequent Events up to Date of Practitioner's Report:
If the practitioner becomes aware of events occurring between the date of the financial statements and the date of the review report that require adjustment or disclosure, the practitioner shall request management to correct those misstatements. No obligation exists to perform procedures after the report date. (If facts emerge after report date but before issue, discuss with management and seek amendments; if management refuses, notify TCWG and prevent reliance).
B. Written Representations (Para 2.4(vi)):
Written representations are an essential source of evidence in a review. Management must confirm fulfillment of responsibilities:
- Preparation and fair presentation of financial statements in accordance with framework;
- Design, implementation, and maintenance of internal controls;
- Providing full access and recording all transactions;
- Completeness of related party disclosures, fraud knowledge, non-compliance, and going concern assessments.
Management Refusal to Provide Written Representations (TYK 14 - CA Pranav):
If management refuses to provide requested written representations (e.g., claiming oral explanations suffice for a limited review), CA Pranav shall:
- Discuss the matter with management and TCWG;
- Re-evaluate the integrity of management and evaluate the effect on reliability of representations and evidence in general; and
- Take Appropriate Action:
• The practitioner SHALL DISCLAIM A CONCLUSION on the financial statements, or
• WITHDRAW FROM THE ENGAGEMENT (if legally possible), if:
(a) There is sufficient doubt about management’s integrity such that representations are not reliable; OR
(b) Management does not provide required representations in respect of its basic responsibilities for preparation of financial statements and recording of all transactions!
Forming the Conclusion & The Practitioner's Review Report
Forming the Practitioner's Conclusion (Para 2.4(viii))
In forming a conclusion on the financial statements as a whole, the practitioner considers uncorrected misstatements, qualitative accounting bias, and fair presentation:
Unmodified Conclusion (Standard Phrasing)
Expressed when the practitioner obtains limited assurance that nothing has come to attention causing belief that financial statements are not prepared, in all material respects, in accordance with the applicable framework.
| Framework Type | Mandatory Exact Phrasing to be Used |
|---|---|
| Fair Presentation Framework (e.g., AS / Ind AS) |
"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 (or do not present fairly, in all material respects), in accordance with the applicable financial reporting framework." |
| Compliance Framework (Strict rules-based) |
"Based on our review, 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." |
Modified Conclusions Matrix under SRE 2400 (TYK 11)
| Nature of Circumstance | Material but NOT Pervasive | Both Material AND Pervasive |
|---|---|---|
| Financial Statements are Materially Misstated |
QUALIFIED CONCLUSION
"Based on our review, except for the effects of the matter(s)... nothing has come to our attention..." |
ADVERSE CONCLUSION
"Based on our review, due to the significance of the matter(s)... financial statements do not give a true and fair view..." |
| Inability to Obtain Sufficient Appropriate Evidence (Scope Limitation) |
QUALIFIED CONCLUSION
"Based on our review, except for the possible effects of the matter(s)... nothing has come to our attention..." |
DISCLAIMER OF CONCLUSION
"Due to the significance of the matter(s)... we do not express a conclusion on the financial statements." |
Contents of Basis for Conclusion Paragraph (TYK 11 - CA Kishore):
In relation to material misstatements giving rise to Qualified or Adverse conclusion:
- Quantification: Describe and quantify the financial effects of the misstatement on specific amounts (unless impracticable, in which case so state);
- Narrative Disclosures: Explain how narrative disclosures are misstated;
- Omitted Disclosures: Describe the nature of omitted information and include omitted disclosures where practicable.
Report Elements, EOM, OM & Documentation (Para 2.5 - 2.7)
1. Emphasis of Matter (EOM) Paragraph (Para 2.5):
Used to draw users’ attention to a matter appropriately presented or disclosed in the financial statements that, in the practitioner’s judgment, is of such importance that it is fundamental to users’ understanding (e.g. significant uncertainties, early adoption of standards). EOM does not modify the review conclusion.
2. Other Matter (OM) Paragraph (Para 2.5):
Used to communicate a matter other than those presented or disclosed in the financial statements that is relevant to users’ understanding of the review, the practitioner’s responsibilities, or the review report.
3. Engagement Documentation Requirements (Para 2.7 & TYK 4):
The practitioner shall document in a timely manner, sufficient to enable an experienced practitioner with no previous connection to understand:
- The nature, timing, and extent of procedures performed to comply with SRE 2400 and legal requirements;
- Results obtained and practitioner’s conclusions formed thereon;
- Significant matters arising, conclusions reached, and significant professional judgments made;
- Discussions with management and TCWG; and
- How any inconsistencies identified with significant matters were addressed.
Audit vs. Review: Comprehensive Comparative Matrix (Para 2.8 & TYK 8)
| Dimension | Audit Engagement (SAs 200 - 799) | Review Engagement (SRE 2400 / 2410) |
|---|---|---|
| Nature of Engagement | Reasonable assurance engagement. | Limited assurance engagement. |
| Level of Assurance | High, but not absolute, level of assurance. Engagement risk reduced to an acceptably low level. | Moderate level of assurance. Engagement risk reduced to an acceptable level (greater risk than audit). |
| Evidence Gathering Procedures | Elaborate and extensive: Risk assessment, tests of controls, substantive tests of details, physical verification, circularisations. | Fewer and less extensive: Primarily inquiries and analytical procedures. Substantive tests only when misstatements suspected. |
| Depth of Understanding | In-depth understanding of internal control sufficient to assess risks of material misstatement and test operating effectiveness. | Understanding of entity and internal control sufficient to plan review and identify areas where misstatements are likely to arise. |
| Form of Assurance Expression | Positively worded opinion: "In our opinion, the financial statements give a true and fair view..." | Negatively worded conclusion: "Based on our review, nothing has come to our attention that causes us to believe..." |
| Auditor Independence | Strictly Mandatory under Code of Ethics and Companies Act. | Strictly Mandatory under Code of Ethics (Assurance engagement). |
3. SRE 2410: Review of Interim Financial Information Performed by the Independent Auditor of the Entity
Overview, Scope & Statutory Applicability
SRE 2410 deals with the auditor’s professional responsibilities when the auditor undertakes an engagement to review the interim financial information of an audit client, and on the form and content of the report.
"In other words, SRE 2410 applies exclusively when the review of interim financial information is performed by the INDEPENDENT AUDITOR of the financial statements of the entity!"
| Core Aspect | SRE 2410 Statutory Requirement |
|---|---|
| What is Interim Financial Information? | Financial information that is prepared and presented in accordance with an applicable financial reporting framework (e.g., Ind AS 34 / AS 25) and comprises either a complete or condensed set of financial statements for a period shorter than the entity's financial year (e.g. quarterly financial results of a listed company). |
| SEBI LODR Regulation 33 Mandate | Under Regulation 33 of SEBI (LODR) Regulations, 2015, listed companies must submit quarterly financial results to stock exchanges, accompanied by a Limited Review Report issued by their statutory auditor under SRE 2410 (or an audit report). |
Objective of Interim Review & Terms of Engagement (Paras 3.1 - 3.2)
As per Para 3.1 of SRE 2410, the primary objective is:
"To enable the auditor to express a conclusion whether, on the basis of the review, anything has come to the auditor’s attention that causes the auditor to believe that the interim financial information is not prepared, in all material respects, in accordance with an applicable financial reporting framework."
The auditor makes inquiries and performs analytical and other review procedures in order to reduce to a moderate level the risk of expressing an inappropriate conclusion when the interim financial information is materially misstated.
Distinct from an Audit Opinion: A review of interim financial information does not provide a basis for expressing an opinion on whether the financial information gives a true and fair view. A review is not designed to obtain reasonable assurance. It does not provide all of the evidence that would be required in an audit.
Agreeing Terms of Engagement (Para 3.2): The auditor and client agree on the terms of the engagement, ordinarily recorded in a separate engagement letter covering the objective and scope, management’s responsibilities, auditor’s responsibilities, the assurance obtained, and the expected form and content of the report.
The 10 Procedures to Update Understanding of the Entity (Para 3.3 & TYK 2, 15)
Because the auditor has audited the entity’s annual financial statements, they already possess an understanding of the business and its internal control. In planning an interim review, the auditor updates this understanding. SRE 2410 prescribes 10 specific procedures to update understanding:
| # | Procedure to Update Understanding | Focus & Purpose in Quarterly Review |
|---|---|---|
| 1 | Read Prior Documentation | Read documentation of preceding year's audit and reviews of prior interim period(s) of current & prior year to identify recurring or unresolved matters. |
| 2 | Consider Significant Risks | Consider significant risks identified in prior year audit, including the risk of management override of controls. |
| 3 | Read Recent Financial Info | Read the most recent annual and comparable prior period interim financial statements. |
| 4 | Determine Interim Materiality | Consider materiality with reference to the applicable framework as it relates to interim information to determine the nature and extent of review procedures. |
| 5 | Consider Prior Misstatements | Consider the nature and magnitude of any corrected and uncorrected misstatements identified in the prior year's audit. |
| 6 | Consider Ongoing Deficiencies | Consider significant financial accounting and reporting matters of ongoing importance, such as material weaknesses in internal control. |
| 7 | Internal Audit Results | Consider results of any internal audit activities and subsequent corrective actions taken by management. |
| 8 | Inquire on Fraud Risks | Inquire of management about results of management's assessment of the risk that interim financial information may be materially misstated due to fraud. |
| 9 | Inquire on Business Changes | Inquire of management about the effect of significant changes in the entity’s business activities, customer base, or product lines. |
| 10 | Inquire on Internal Control Changes | Inquire of management about any changes in internal control and the potential effect of such changes on interim financial reporting. |
Inquiries, Analytical & Other Review Procedures (Para 3.4)
The auditor executes targeted procedures focusing on areas of high risk and significant accounting changes:
Reconciliation with Books
Trace interim financial information to underlying accounting records (general ledger, consolidating schedules) and other supporting data.
Reading Minutes
Read minutes of meetings of shareholders, TCWG, and audit committee to identify matters affecting interim financial information.
Litigation & Claims Rule under SRE 2410 (Exam Trap):
A review of interim financial information ORDINARILY DOES NOT REQUIRE corroborating inquiries about litigation or claims. Therefore, it is ordinarily NOT necessary to send an inquiry letter to the entity's lawyer! Direct communication with the entity’s lawyer is appropriate only if a matter comes to attention causing the auditor to question compliance and the lawyer has pertinent info.
Subsequent Events Inquiry (TYK 4 - CA Pankaj Chaturvedi):
The auditor shall inquire whether management has identified all events up to the date of the review report that may require adjustment or disclosure in the interim information. It is NOT necessary for the auditor to perform other procedures to identify events occurring after the date of the review report.
Additional Inquiries / Procedures for Questionable Matters:
When a matter comes to attention questioning whether a material adjustment is needed (e.g. a significant revenue transaction recorded at quarter-end), the auditor performs additional procedures sufficient to resolve the doubt — such as discussing contract terms with senior marketing and accounting personnel, or reading the sales contract.
Evaluation of Misstatements & Management Representations (Paras 3.5 - 3.6)
Evaluation of Misstatements (Para 3.5)
Evaluate individually and in the aggregate whether uncorrected misstatements that have come to attention are material to the interim financial information. Exercise professional judgment regarding quantitative thresholds and qualitative disclosures.
Written Representations (Para 3.6)
Obtain written representations from management acknowledging responsibility for internal control, preparation per framework, uncorrected misstatements being immaterial, and disclosing all known fraud, non-compliance, and subsequent events.
Auditor's Responsibility for Accompanying Other Information (Para 3.7)
The auditor shall read other information accompanying the interim financial statements to identify material inconsistencies:
| Situation | Auditor's Mandatory Course of Action |
|---|---|
| Material Inconsistency Identified |
Consider whether interim financial information or other information needs amendment:
• If interim financial information needs amendment and management refuses $implies$ Modify review report. • If other information needs amendment and management refuses $implies$ Include an additional paragraph in review report describing inconsistency, withhold issuance, or withdraw! |
| Alternative Earnings Measures Trap (ICAI Text Example) | Management presents alternative measures of earnings (e.g., EBITDA / adjusted figures) that portray results more positively than interim financial information, and such measures are given excessive prominence, are not clearly defined, or not reconciled $implies$ Consider potentially misleading; seek amendment or report accordingly! |
| Material Misstatement of Fact | Discuss with management. If management refuses to amend, consider notifying TCWG and obtaining legal advice. |
Communication with Management, Audit Committee & TCWG (Para 3.8 & TYU 4)
When the auditor believes a material adjustment must be made for interim information to comply with framework:
The 3 Critical Options Available to Auditor (TYU 4 - CA Seerat):
- Option (a): Whether to MODIFY THE REVIEW REPORT (express a qualified or adverse conclusion); OR
- Option (b): The possibility of WITHDRAWING FROM THE REVIEW ENGAGEMENT; AND
- Option (c): The possibility of RESIGNING FROM THE APPOINTMENT TO AUDIT THE ANNUAL FINANCIAL STATEMENTS!
Structure & Elements of Interim Review Report under SRE 2410 (Para 3.9 & TYK 8)
The review report issued under SRE 2410 shall be in writing and contain the following mandatory elements:
| # | Report Element | Specific Text & Standard Mandate |
|---|---|---|
| 1 | Title | Clearly titled: "Independent Auditor’s Review Report". |
| 2 | Addressee | Addressed to the Board of Directors (or appointing authority). |
| 3 | Identification of Interim Info | Identification of the interim financial information reviewed (Statement of Unaudited Financial Results for the quarter/half-year ended). |
| 4 | Management's Responsibility | Statement that interim financial information is the responsibility of management and approved by the Board of Directors. |
| 5 | Auditor's Responsibility | Statement that the auditor’s responsibility is to express a conclusion on the interim financial information based on the review. |
| 6 | Reference to SRE 2410 | Statement that the review was conducted in accordance with SRE 2410 issued by ICAI. |
| 7 | Description of Review & Limitations |
Statement that review consists of making inquiries (primarily of persons responsible for financial and accounting matters) and applying analytical and other review procedures.
"A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion." |
| 8 | Conclusion (Negative Assurance) | "Based on our review, nothing has come to our attention that causes us to believe that the accompanying Statement... is not prepared, in all material respects, in accordance with applicable accounting standards... or that it contains any material misstatement." |
| 9 | Date, Place & Signature | Date of report, place of signature, and auditor's signature (Firm FRN & Membership No.). |
Mandatory UDIN Requirement (TYK 8(ii)): Generating a Unique Document Identification Number (UDIN) is strictly mandatory for all review reports issued by practicing Chartered Accountants in India pursuant to the ICAI Mandate!
Departures, Scope Limitations & Going Concern under SRE 2410 (Paras 3.10 - 3.12)
1. Departures from Framework (Para 3.10):
If interim information departs from framework:
• Qualified Conclusion: Expressed when the effect is material but not pervasive.
• Adverse Conclusion: Expressed when the effect is both material and pervasive.
2. Limitation on Scope (Para 3.11):
• If management imposes scope limitation prior to acceptance $implies$ Do not accept.
• If imposed during review $implies$ Request removal; if refused, disclaim conclusion or withdraw, and consider resigning from statutory audit!
• If limitation due to external causes $implies$ Qualified conclusion or disclaimer of conclusion.
3. Going Concern & Material Uncertainties (Para 3.12 & TYK 6, TYU 3):
| Circumstance | Type of Review Report under SRE 2410 |
|---|---|
| Material Uncertainty ADEQUATELY DISCLOSED in interim information (TYU 3 - Fire loss) | Modify review report by adding an EMPHASIS OF MATTER (EOM) PARAGRAPH to highlight the material uncertainty. (Conclusion remains unmodified!). |
| Material Uncertainty NOT ADEQUATELY DISCLOSED in interim information (TYK 6 - GAK Ltd) | Express a QUALIFIED OR ADVERSE CONCLUSION, as appropriate, making specific reference to the existence of the material uncertainty. |
Scenario: Major Fire in Fabric Plant & Uninsured Assets Disclosed Appropriately
During review of the quarterly results of a company of which you are auditor under SRE 2410, inquiries reveal that there has been a major fire in the fabric processing plant during the quarter. It has resulted in massive disruption in operations.
Machinery and inventories of the plant were uninsured due to staff carelessness leading to substantial losses. The matter has been appropriately disclosed in the interim financial information.
ICAI Model Answer:
1. Analysis of Event:
Uninsured assets damaged in a disaster leading to massive operational disruption and substantial financial losses are clear indicators of events/conditions that cast significant doubt about the entity's ability to continue as a going concern.
2. Applicable Provision of SRE 2410:
In accordance with SRE 2410, if a material uncertainty relating to an event or condition comes to the auditor’s attention casting significant doubt on going concern, and adequate disclosure is made in the interim financial information, the auditor modifies the review report by ADDING AN EMPHASIS OF MATTER PARAGRAPH!
Conclusion:
The auditor should include an Emphasis of Matter paragraph in the review report drawing attention to the disclosure note describing the fire and uninsured losses. The review conclusion is not modified on this account.
Scenario: CA Seerat (Management Refusal to Make Material Adjustment)
CA Seerat is conducting a review of the quarterly financial information of a company of which she is also statutory auditor. She believes that it is necessary to make a material adjustment to the quarterly financial information for it to comply with framework.
She communicated the matter to the CFO and the Audit Committee. However, no response was received even after waiting for a reasonable time.
ICAI Model Answer:
In accordance with Para 3.8 of SRE 2410, when management and those charged with governance (Audit Committee) fail to respond appropriately within a reasonable period of time regarding a necessary material adjustment, the following THREE OPTIONS are available to CA Seerat:
- Option (a): Whether to modify the review report (issue a qualified or adverse conclusion); OR
- Option (b): The possibility of withdrawing from the review engagement; AND
- Option (c): The possibility of resigning from the appointment to audit the annual financial statements!
Integrated Case Scenario: Fast Operations Limited (SEBI Regulation 33 Review)
Draft Review Report on Interim Financial Results: Fast Operations Limited
Below is given an incomplete draft text of the review report on the review of financial results of Fast Operations Limited, a listed company, in accordance with SEBI regulations. The review is a compulsory requirement under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Regulation 33). The incomplete areas of the report have been marked as XXXX.
INDEPENDENT AUDITOR’S REVIEW REPORT ON REVIEW OF INTERIM STANDALONE FINANCIAL RESULTS
TO XXXX [Point 1]
1. We have reviewed the accompanying Statement of Standalone unaudited financial results of Fast Operations Limited (“the Company”), for the quarter and six months ended September 30, 2025 (“the Statement”), being submitted by the Company pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended.
2. This Statement, which is the responsibility of the Company’s Management and approved by the Company’s Board of Directors, has been prepared in accordance with the recognition and measurement principles laid down in the Indian Accounting Standard 34 “Interim Financial Reporting” (“Ind AS 34”), prescribed under Section 133 of the Companies Act, 2013 read with relevant rules issued thereunder and other accounting principles generally accepted in India. Our responsibility XXXXXXXXXXX [Point 2].
3. We conducted our review of the Statement in accordance with the Standard XXXX [Point 3], issued by the Institute of Chartered Accountants of India (ICAI). A review of interim financial information consists of making inquiries, primarily of the company’s personnel responsible for financial and accounting matters and applying analytical and other review procedures. A review is substantially XXXXXXXXXXXXXXXXXXXXXXXXX [Point 4].
4. Based on our review conducted as stated in paragraph 3 above, XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX [Point 5].
Multiple Choice Questions (Solved with ICAI Rationale)
1. The name of the addressee is missing from the text of draft review report. Identify the most appropriate option:
ICAI Rationale: Under SRE 2410 and Regulation 33 of SEBI (LODR) Regulations, 2015, the quarterly limited review report is addressed to the Board of Directors of the company, who approve the interim results before submission to stock exchanges.
2. Under para 2 of the case study, choose the appropriate sentence beginning with “Our responsibility XXXX”:
ICAI Rationale: In a review engagement, the auditor expresses a "conclusion" (providing limited assurance), not an "opinion" (which is reserved exclusively for reasonable assurance audit engagements).
3. Given the description of the case study, which of the following engagement standards is most appropriate to be stated in para 3?
ICAI Rationale: The review of interim financial results of a listed company under SEBI LODR Regulation 33 by its independent statutory auditor is governed strictly by SRE 2410. SRE 2400 applies when the practitioner is not the statutory auditor.
4. Which of the following statements is most appropriate to be inserted in the sentence beginning with “A review is substantially XXXX” in para 3?
ICAI Rationale: SRE 2410 prescribes the precise wording: "A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing... and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion."
5. Complete paragraph 4 of the case study from the following options:
ICAI Rationale: SRE 2410 requires negative assurance formulation: "Nothing has come to our attention that causes us to believe that the accompanying Statement... has not disclosed the information required to be disclosed... or that it contains any material misstatement."
Test Your Knowledge (All 15 ICAI Questions Fully Solved)
The following 15 theoretical and practical case questions cover every dimension of SRE 2400 and SRE 2410 tested by ICAI. Each question contains a fully articulated model answer with exact ICAI terminology and statutory reasoning:
TYK 1: Importance of "Inquiry" in Review of Financial Statements
TheoryICAI Model Answer:
As per Para 2.4 of SRE 2400, inquiry is one of the two foundational pillars of a review engagement (along with analytical procedures):
- Understanding Management Judgments: Inquiries of management and those responsible for financial reporting provide crucial insight into the entity's accounting policies, practices, and significant accounting estimates.
- Uncovering Unrecorded Items: Inquiry is vital for uncovering subsequent events, unrecorded commitments, contingencies, pending litigation, and claims that might not be readily apparent from trial balance figures.
- Related Party & Fraud Inquiries: Inquiring into related party relationships, transactions, known or suspected fraud, and instances of non-compliance with laws and regulations.
- Corroborating Analytical Variances: Inquiries provide context and explanations for unusual fluctuations, trends, and deviations identified during analytical procedures.
TYK 2: CA Aditya Jain — 5 Procedures to Update Understanding (SRE 2410)
Interim ReviewICAI Model Answer:
As per Para 3.3 of SRE 2410, CA Aditya Jain can update his understanding of the entity, its environment, and internal control by performing any 5 of the following procedures:
- Read Prior Documentation: Reading documentation of preceding year’s audit and reviews of prior interim period(s) of the current year and corresponding period(s) of the prior year.
- Consider Significant Risks: Considering any significant risks identified in the prior year's audit, including the risk of management override of controls.
- Read Recent Financial Information: Reading the most recent annual and comparable prior period interim financial information.
- Consider Materiality: Considering materiality with reference to the applicable financial reporting framework as it relates to interim financial information.
- Consider Prior Misstatements & Control Deficiencies: Considering the nature of any corrected and uncorrected misstatements in prior periods, and significant reporting matters of ongoing importance (e.g. material weaknesses in internal control).
TYK 3: Significance of "Date of Report" in a Review Report
Reporting RuleICAI Model Answer:
As per Para 2.4 of SRE 2400 and SRE 2410, the date of the review report has paramount professional and legal significance:
- Evidence Cut-off Point: The practitioner cannot date the report earlier than the date on which the practitioner has obtained sufficient appropriate evidence on which to base the conclusion.
- Subsequent Events Responsibility: The date informs readers that the practitioner has considered the effect of events and transactions of which the practitioner became aware and that occurred up to that date.
- Management Responsibility Acknowledged: The report cannot be dated before the date on which management or TCWG has approved the financial statements and asserted that they have taken responsibility for them.
TYK 4: CA Pankaj Chaturvedi — Subsequent Events Responsibility (SRE 2410)
Subsequent EventsICAI Model Answer:
As per Para 3.4 of SRE 2410:
- Duty to Inquire: The auditor should inquire whether management has identified all events up to the date of the review report (28-07-2026) that may require adjustment to or disclosure in the interim financial information for the quarter ended 30-06-2026.
- No Other Procedures Required: It is NOT necessary for CA Pankaj Chaturvedi to perform other active procedures (such as examining bank statements or subsequent transactions) to identify events occurring after the date of the review report.
TYK 5: Going Concern Doubt Steps in Review Engagement (SRE 2400)
Going ConcernICAI Model Answer:
Under Para 2.4(iv) of SRE 2400, if the practitioner becomes aware of events/conditions casting significant doubt on going concern, the practitioner shall:
- Inquire of Management: Inquire about management's plans for future actions affecting the entity's ability to continue as a going concern, the feasibility of those plans, and whether management believes the outcome will improve the situation.
- Evaluate Inquiry Results: Evaluate management's responses to consider whether they provide a sufficient basis to:
(i) Continue presenting financial statements on going concern basis; or
(ii) Conclude whether the financial statements are materially misstated or otherwise misleading regarding going concern. - Consider All Relevant Information: Consider management's responses in light of all relevant information of which the practitioner is aware as a result of the review.
TYK 6: GAK Limited / CA Reena — Working Capital Crisis & Going Concern (SRE 2410)
Case ApplicationICAI Model Answer:
As per Para 3.12 of SRE 2410:
Situation 1: GAK Limited has NOT disclosed material uncertainties:
If a material uncertainty casting significant doubt about going concern is not adequately disclosed in interim financial information, the auditor SHALL EXPRESS A QUALIFIED OR ADVERSE CONCLUSION, as appropriate! The report should include specific reference to the fact that there is such a material uncertainty.
Situation 2: GAK Limited HAS disclosed material uncertainties:
CA Reena CANNOT give a clean, unmodified report without modification! When adequate disclosure is made, the auditor modifies the review report by ADDING AN EMPHASIS OF MATTER (EOM) PARAGRAPH to highlight the material uncertainty relating to going concern.
TYK 7: Primary Review Procedures & Report Scope Description (SRE 2400)
Core TheoryICAI Model Answer:
1. Primary Procedures: Inquiry and Analytical Procedures. They are cost-effective, targeted, and sufficient to obtain limited assurance without extensive substantive testing.
2. Mandatory Scope Description & Limitations Statements in Report:
- A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.
- A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing.
- Consequently, it does not enable the practitioner to obtain assurance that they would become aware of all significant matters that might be identified in an audit.
- Accordingly, the practitioner DOES NOT express an audit opinion.
TYK 8: Amar Projects Pvt. Ltd / CA Tanvi — JV Due Diligence Review & UDIN
Case Application(i) What kind of assurance is given in review vs audit?
(ii) Key elements of written report under SRE 2410 & whether UDIN is required?
ICAI Model Answer:
(i) Assurance in Review vs. Audit:
A review provides limited assurance (moderate level, negatively worded conclusion: "nothing has come to our attention..."), whereas an audit provides reasonable assurance (high level, positively worded opinion: "true and fair view").
(ii) Key Elements of Review Report under SRE 2410:
Title, Addressee, Interim info identification, Management responsibility, Auditor responsibility, Conducted per SRE 2410, Review description & limitations, Negative assurance conclusion, Date, Signature, Place.
UDIN Requirement: Yes, generating a UDIN is strictly mandatory for CA Tanvi for this review report as per ICAI mandates!
TYK 9: CA Amar — Acceptance & Continuance Restrictions (SRE 2400)
Acceptance RulesICAI Model Answer:
As per Para 2.2 of SRE 2400, unless required by law, CA Amar SHALL NOT ACCEPT the review engagement in the following situations:
- No Rational Purpose: When there is no rational purpose (e.g. significant scope limitation or inappropriate association with CA's name).
- Ethical / Independence Violation: Reason to believe relevant ethical requirements, including independence, will not be satisfied.
- Unavailable / Unreliable Information: Information needed to perform review is likely to be unavailable or unreliable.
- Management Integrity Doubts: Cause to doubt management's integrity.
- Upfront Scope Limitation: Management imposes scope limitation that would result in disclaiming a conclusion.
TYK 10: Best Textiles / Prime Textiles / CA Sumit — Preconditions (SRE 2400)
PreconditionsICAI Model Answer:
Under Para 2.3 of SRE 2400, prior to accepting, CA Sumit must establish that the following preconditions exist:
- Acceptable Framework: Determine whether the financial reporting framework is acceptable (including special purpose framework understanding).
- Management Responsibility for Financial Statements: Agreement of management acknowledging responsibility for preparation and fair presentation of statements in accordance with framework.
- Management Responsibility for Internal Controls: Acknowledging responsibility for internal controls to ensure statements are free from material misstatement.
- Unrestricted Access: Management agreement to provide full access to all information, additional information, and unrestricted access to personnel.
TYK 11: Glow Management Ltd / CA Kishore — Qualified Conclusion Phrasing (SRE 2400)
Qualified ConclusionICAI Model Answer:
(i) Phrases for Qualified Conclusion Paragraph (Para 2.4(viii)):
• Fair Presentation Framework: “Based on our review, except for the effects of the matter(s) described in the Basis for Qualified Conclusion paragraph, nothing has come to our attention that causes us to believe that the financial statements do not give a true and fair view (or do not present fairly, in all material respects), in accordance with the applicable financial reporting framework.”
• Compliance Framework: “Based on our review, except for the effects of the matter(s) described in the Basis for Qualified Conclusion paragraph, 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.”
(ii) Matters in Basis for Conclusion Paragraph:
• Describe and quantify the financial effects of deferred revenue misstatement on amounts/disclosures (unless impracticable, in which case so state);
• Explain how narrative disclosures are misstated; and
• Describe the nature of omitted information and include it where practicable.
TYK 12: MK Limited / CD & Co. — Objective of SRE 2410 Engagement
Core StandardICAI Model Answer:
As per Para 3.1 of SRE 2410, the objective of the engagement assigned to CD & Co. is:
- Express Negative Assurance: To enable the auditor to express a conclusion whether, on the basis of the review, anything has come to the auditor's attention causing belief that interim financial information is not prepared, in all material respects, in accordance with applicable framework (Ind AS 34 / SEBI LODR Reg 33).
- Reduce Risk to Moderate Level: Inquiries and analytical procedures reduce to a moderate level the risk of expressing an inappropriate conclusion.
- Not an Audit: The review does not provide reasonable assurance and does not provide a basis for expressing an audit opinion on true and fair view.
TYK 13: M/s RSP & Associates / CA R — How Analytical Procedures Assist in Review
ProceduresICAI Model Answer:
As per Para 2.4 of SRE 2400, performing analytical procedures assists the practitioner in:
- Identifying High-Risk Areas: Highlighting areas where material misstatements are likely to arise.
- Unusual Trends & Fluctuations: Detecting unexpected changes or the absence of expected relationships among financial and non-financial data.
- Corroborating Inquiries: Providing objective corroboration or contradiction to oral inquiries made of management.
- Triggering Additional Procedures: Providing a sound basis for designing focused additional procedures where significant unexplained variations persist.
TYK 14: LAN Innovations Ltd / CA Pranav — Management Refusal of Written Representations
Representations DilemmaICAI Model Answer:
As per Para 2.4(vi) of SRE 2400, if management refuses written representations:
- Discuss with management and TCWG;
- Re-evaluate integrity of management and the effect on reliability of representations and evidence in general;
- Determine impact on the review conclusion.
Mandatory Disclaimer or Withdrawal:
CA Pranav SHALL DISCLAIM A CONCLUSION OR WITHDRAW FROM THE ENGAGEMENT (if legally possible) if:
• The practitioner concludes there is sufficient doubt about management’s integrity such that representations are not reliable; OR
• Management fails to provide the required representations regarding its responsibilities for preparation of financial statements and recording of all transactions.
TYK 15: CA Vardhman — 5 Procedures to Update Understanding (SRE 2410)
Interim ReviewICAI Model Answer:
As per Para 3.3 of SRE 2410, CA Vardhman can update his understanding by:
- Reading documentation of preceding year's audit and reviews of prior interim period(s);
- Considering significant risks, including management override of controls identified in the audit;
- Reading the most recent annual and comparable prior period interim financial information;
- Considering materiality as it relates to interim financial information;
- Inquiring of management regarding changes in internal control, business activities, or results of fraud risk assessments.
Master Standards Suite Matrix: SAs vs SREs vs SAEs vs SRSs
Complete Overview of ICAI Engagement Standards Suite
| Standard Suite | Full Scope & Target Subject Matter | Level of Assurance | Reporting Format | Independence |
|---|---|---|---|---|
| SAs (100 - 899) | Audits of Historical Financial Statements | Reasonable Assurance (High) | Positive Opinion ("True & fair view") | Mandatory |
| SREs (2400 / 2410) | Reviews of Historical Financial Information | Limited Assurance (Moderate) | Negative Conclusion ("Nothing has come...") | Mandatory |
| SAEs (3400 / 3420) | Assurance Engagements Other than Audits/Reviews | Reasonable or Limited Assurance | Opinion or Conclusion | Mandatory |
| SRSs (4400 / 4410) | Related Services (Agreed-Upon Procedures / Compilations) | ZERO Assurance | Factual Findings / Compilation Report | Not Mandatory |
High-Frequency Exam Traps for Chapter 10
Students often mix SREs with SRSs. Review is an ASSURANCE engagement, so Independence is strictly mandatory for both SRE 2400 and SRE 2410!
Corroborating inquiries with the client's lawyer is NOT ordinarily necessary in interim review under SRE 2410, unlike an annual audit.
If going concern uncertainty is ADEQUATELY DISCLOSED $implies$ Add Emphasis of Matter (EOM). If NOT adequately disclosed $implies$ Qualified or Adverse Conclusion!
Is reviewer the statutory auditor? If YES $implies$ SRE 2410. If NO (external independent practitioner) $implies$ SRE 2400.