Chapter 13 Reporting on assurance engagements

Question 1

1.1 Modifications to the report

Answer 1

ISAE 3400 sets out the contents of an assurance report on prospective financial information.
Assurance reports need to be modified if the practitioner is unable to say, ‘nothing has come to our attention’. ISAE 3400 sets out the implications for the report:
- Presentation and disclosure of the prospective financial information is not adequate: the implication for the report is qualified or adverse opinion
- One or more significant assumptions do not provide a reasonable basis for the prospective financial information: the implication for the report is adverse opinion
- Limitation on scope: the implication for the report is disclaim the opinion
ISAE 3400 also suggests withdrawing from the engagement as an alternative to offering these modified opinions.

Question 2

2.1 Review engagements – unmodified reports

Answer 2

ISRE 2400 includes example review reports in the Appendix. It sets out the work that should be performed when an assurance provider, other than the statutory auditor, reviews historical financial information.

Question 3

2.2 Modifications to the report

Answer 3

Assurance reports may need to be modified if the practitioner is unable to say, ‘nothing has come to our attention’. The principles of modifying assurance reports are similar to audit reports.
- Material misstatement, the implication for the report is qualified or adverse conclusion
- Material limitation on scope, the implication is qualified or disclaimer of conclusion

Question 4

3.1 Comparison to audit reports

Answer 4

The comparison of audit reports to assurance reports is examined frequently. The following standards are looked at ISA 700, ISRE 2400 and ISAE 3400.