An independent review also provides assurance on your financial reporting. However, a review is less detailed than an audit providing "limited" assurance.
WHY GET A REVIEW?
While providing less assurance than an audit, there is still value added by a review, as it ensures a second pair of eyes (from a qualified professional) has reviewed the financial report.
A review especially helpful for smaller not-for-profit organisations where the assets being managed are modest, and where there is only a sole charge Treasurer. This is especially true if you are a Registered Charity, with the changes in the Charities Act requirements for financial reporting.
A review is commonly undertaken in any of the following circumstances:
- Your founding document requires it, to ensure good governance practices are in place.
- The governing body requires only a modest level of independent assurance, therefore this is a cost effective option.
- Legislation requires it due to the scale of your operations.
- If you don't have a qualified accountant prepare your financial statements then this is an opportunity for an independent accountant to work with your Treasurer, who may benefit from the knowledge transfer.
A review report provides negative assurance report along the lines that "nothing has come to our attention" to suggest that financial statements are not valid and reliable. In this limited review we undertake mainly the following procedures:
- We discuss with management key aspects of how your organisation operates.
- We perform a high level analysis of the financial report.
- We evaluate compliance with applicable financial reporting standards.
APPLICABLE STANDARDS: ISRE (NZ) 2400: Review of Historical Financial Statements Performed by an Assurance Practitioner
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