Page 188 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
Expresses a conclusion: In a review of financial statements, 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. Such financial statements may have been
prepared using a general purpose framework or special purpose framework.
Inquiry and Analytical Procedures: The practitioner performs primarily inquiry and analytical procedures to
obtain sufficient and appropriate evidence as the basis for a conclusion on the financial statements as a whole.
Addressing Potential Material Misstatements: If the practitioner becomes aware of a matter causing belief that
the financial statements may be materially misstated, additional procedures are designed and performed as
necessary to conclude on the financial statements.

(CNO SRE 2400.040) Objectives in a review of financial statements in accordance with SRE 2400
Practitioner’s Objectives in SRE 2400: The practitioner’s objectives in a review of financial statements in
accordance with SRE 2400 are to obtain limited assurance, primarily by making an inquiry and performing
analytical procedures, about whether the financial statements as a whole are free from material misstatement.
Expressing a Conclusion: This enables the practitioner to express a conclusion on whether anything has come
to his attention that causes him to believe the financial statements are not prepared, in all material respects, in
accordance with an applicable financial reporting framework.
Reporting on Financial Statements: The practitioner is required to report on the financial statements as a
whole and communicate as required by this SRE.
Modified Conclusion or Withdrawal: In all cases when limited assurance cannot be obtained and a modified
conclusion in the practitioner’s report is insufficient in the circumstances, this SRE requires action.The
practitioner is either to disclaim a conclusion in the report issued for the engagement or, where appropriate, to
withdraw from the engagement if withdrawal is possible under applicable law or regulations.
Compliance with Ethical Requirements and Engagement Level Quality Control
Compliance with Ethical Requirements: The practitioner shall comply with relevant ethical requirements,
including those pertaining to independence.
Engagement Partner’s Responsibility: The engagement partner is responsible for the overall quality of each
review engagement.

(CNO SRE 2400.060) Factors affecting Acceptance and Continuance of Client Relationships and Review
Engagements:
(Shortcut: LE READ Information)
Limitation on Scope: Management or those charged with governance impose a limitation on the scope of the
practitioner’s work in the terms of a proposed review engagement such that the practitioner believes that the
limitation will result in the practitioner disclaiming a conclusion on the financial statements.
Ethical Requirements: The practitioner has reason to believe that relevant ethical requirements, including
independence, will not be satisfied.
Rational Purpose Requirement: Unless required by law or regulation, the practitioner shall not accept a review
engagement if the practitioner is not satisfied that there is a rational purpose for the engagement. Assurance
engagements may only be accepted when the engagement exhibits certain characteristics conducive to achieving
the practitioner’s objectives specified for the engagement.
Examples of Irrational Purpose: It may be unlikely that there is a rational purpose for the engagement if, for
example, there is a significant limitation on the scope of work or the practitioner suspects association of the
practitioner’s name with the financial statements in an inappropriate manner. Similarly, when the engagement
is intended to meet compliance requirements of relevant law or regulation and such law or regulation requires
the financial statements to be audited, there is no rational purpose for such a review engagement.

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