Review report required elements matrix

Guidance: review report – required elements

Section of the review report	When included in the review report	Required elements	Reference
Title	Always	Include the word “independent” for example, “Independent Accountant’s Review Report".	AR-C 90.76a
Addressee	Always	Includes an appropriate addressee.	AR-C 90.76b
Introductory paragraph	Always	Identifies the entity whose financial statements have been reviewed. States that the financial statements identified in the report were reviewed. Identifies the financial statements. Specifies the date or period covered by each financial statement. Includes a statement that a review includes primarily applying analytical procedures to management’s (owner’s) financial data and making inquiries of company management (owners). Includes a statement that a review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole, and that, accordingly, the accountant does not express such an opinion.	AR-C 90.76c
A section with the heading “Management’s responsibility for the financial statements"	Always	Includes an explanation that management is responsible for the preparation and fair presentation of the financial statements in accordance with the applicable financial reporting framework. States that this responsibility includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement whether due to fraud or error.	AR-C 90.76d
A section with the heading “Accountant’s responsibility”	Always	States that the accountant’s responsibility is to conduct the review engagement in accordance with SSARSs promulgated by the Accounting and Review Services Committee of the AICPA. Explains that those standards require that the accountant perform the procedures to obtain limited assurance as a basis for reporting whether the accountant is aware of any material modifications that should be made to the financial statements for them to be in accordance with the applicable financial reporting framework. States the accountant believes that the results of the accountant's procedures provide a reasonable basis for the accountant's conclusion. States the accountant is required to be independent of the entity and to meet the accountant’s other ethical responsibilities, in accordance with the relevant ethical requirements relating to the review.	AR-C 90.76e
A concluding section **	Always	A concluding section with an appropriate heading that includes the accountant’s conclusion on the financial statements in accordance with AR-C 90.67--.74, as appropriate. Identifies the country of origin of the financial reporting framework, if applicable. **There are two types of conclusions: (1) unmodified conclusion or (2) modified conclusion.	AR-C 90.76f
Unmodified conclusion	As applicable	Example: Accountant’s conclusion Based on my (our) review, I am (we are) not aware of any material modifications that should be made to the accompanying financial statements for them to be in accordance with [the applicable financial reporting framework].	AR-C 90.68
Modified conclusion **	As applicable	A paragraph, under the appropriate heading, that contains the accountant’s modified conclusion in accordance with AR-C 90.69--.74, as appropriate. A paragraph, under the appropriate heading, that provides a description of the matter or matters giving rise to the modification. **There are two types of modified conclusions: (1) qualified conclusion or (2) adverse conclusion.	AR-C 90.76g
Qualified conclusion	As applicable	Example: Basis for qualified conclusion As disclosed in Note X to these financial statements, accounting principles generally accepted in the United States of America require that inventory cost consist of material, labor, and overhead. Management has informed me (us) that the inventory of finished goods and work in process is stated in the accompanying financial statements at material and labor cost only, and that the effects of this departure from accounting principles generally accepted in the United States of America on financial position, results of operations, and cash flows have not been determined. Qualified conclusion Based on my (our) reviews, except for the effect of the matter described in the Basis for Qualified Conclusion paragraph, I am (we are) not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in accordance with accounting principles generally accepted in the United States of America.	AR-C 90.70, .72, .74, .A216 Illustration 5
Adverse conclusion	As applicable	Example: Basis for adverse conclusion As disclosed in Note X to these financial statements, the Company has not consolidated the financial statements of subsidiary ABC Company it acquired during 20X1 because it has not yet been able to ascertain the fair values of certain of the subsidiary’s material assets and liabilities at the acquisition date. This investment is therefore accounted for on a cost basis by the Company. Under accounting principles generally accepted in the United States of America, the subsidiary should have been consolidated because it is controlled by the Company. Had XYZ Company been consolidated, many elements in the accompanying consolidated financial statements would have been materially affected. The effects on the consolidated financial statements of the failure to consolidate have not been determined. Adverse conclusion Based on my (our) reviews, due to the significance of the matter described in the Basis for Adverse Conclusion paragraph, the financial statements are not in accordance with accounting principles generally accepted in the United States of America.	AR-C 90.70, .73, .74, .A216 Illustration 7
Basis of accounting paragraph	As applicable	The accountant’s review report on financial statements prepared in accordance with a special purpose framework should include an emphasis-of-matter paragraph, under an appropriate heading that: Indicates that the financial statements are prepared in accordance with the applicable special purpose framework. Refers to the note to the financial statements that describes the framework. Indicates that the financial statements are prepared in accordance with the applicable special purpose framework. Refers to the note to the financial statements that describes the framework. States that the special purpose framework is a basis of accounting other than GAAP. For special purpose financial statements prepared in accordance with a contractual basis of accounting, the emphasis-of-matter paragraph should also state that, as a result, the financial statements may not be suitable for another purpose. If the special purpose financial statements are prepared in accordance with the contractual basis of accounting, the accountant’s review report should include, in accordance with AR-C 90.104, an other-matter paragraph, under an appropriate heading, that, in accordance with AR-C 90.106–.109, restricts the use of the accountant’s review report.	AR-C 90.80 - .81
Emphasis of matter paragraph	As applicable	Includes a paragraph within a separate section of the accountant’s report with the heading “Emphasis of a Matter” or other appropriate heading. Includes in the paragraph a clear reference to the matter being emphasized and to where relevant disclosures that fully describe the matter can be found in the financial statements. The paragraph should refer only to information presented or disclosed in the financial statements. Indicate that the accountant’s conclusion is not modified with respect to the matter emphasized. Includes in the paragraph a clear reference to the matter being emphasized and to where relevant disclosures that fully describe the matter can be found in the financial statements. The paragraph should refer only to information presented or disclosed in the financial statements. Indicate that the accountant’s conclusion is not modified with respect to the matter emphasized.	AR-C 90.90
Other matter paragraph (supplementary information)	As applicable	When supplementary information accompanies reviewed financial statements and the accountant’s review report thereon, the accountant should clearly indicate the degree of responsibility, if any, the accountant is taking with respect to such information in either: An other-matter paragraph in the accountant’s review report on the financial statements. A separate report on the supplementary information. Supplementary information subjected to review procedures When the accountant has subjected the supplementary information to the review procedures applied in the accountant’s review of the basic financial statements, the other-matter paragraph in the accountant’s review report on the financial statements or the separate report on the supplementary information should state that: When the accountant has subjected the supplementary information to the review procedures applied in the accountant’s review of the basic financial statements, the other-matter paragraph in the accountant’s review report on the financial statements or the separate report on the supplementary information should state: The supplementary information is presented for purposes of additional analysis and is not a required part of the basic financial statements. The supplementary information is the responsibility of management and was derived from, and relates directly to, the underlying accounting and other records used to prepare the financial statements. The supplementary information has been subjected to the review procedures applied in the accountant’s review of the basic financial statements and whether the accountant is aware of any material modifications that should be made to the supplementary information. The accountant has not audited the supplementary information and does not express an opinion on such information. Supplementary information not subjected to review procedures When the accountant has not subjected the supplementary information to the review procedures applied in the accountant’s review of the basic financial statements, the other-matter paragraph in the accountant’s review report on the financial statements or the separate report on the supplementary information should state that: When the accountant has not subjected the supplementary information to the review procedures applied in the accountant’s review of the basic financial statements, the other-matter paragraph in the accountant’s review report on the financial statements or the separate report on the supplementary information should state: The supplementary information is presented for purposes of additional analysis and is not a required part of the basic financial statements. The supplementary information is the responsibility of management. The accountant has not audited or reviewed the supplementary information and, accordingly, does not express an opinion, a conclusion, nor provide any assurance on such information.	AR-C 90.126 - .127
Other matter paragraph (required supplementary information)	As applicable	Concerning the requirement in AR-C 90.126, with respect to required supplementary information, the accountant should include an other-matter paragraph in the accountant’s review report on the financial statements. The other-matter paragraph should include language to explain the following circumstances, as applicable: The required supplementary information is included, and the accountant performed a compilation engagement on the required supplementary information. The required supplementary information is included, and the accountant reviewed the required supplementary information. The required supplementary information is included, and the accountant did not perform a compilation, review, or audit on the required supplementary information. The required supplementary information is omitted. Some required supplementary information is missing, and some is presented in accordance with the prescribed guidelines. The required supplementary information is included, and the accountant performed a compilation engagement on the required supplementary information. The required supplementary information is included, and the accountant reviewed the required supplementary information. The required supplementary information is included, and the accountant did not perform a compilation, review, or audit on the required supplementary information. The required supplementary information is omitted. Some required supplementary information is missing, and some is presented in accordance with the prescribed guidelines The accountant has identified departures from the prescribed guidelines. The accountant has unresolved doubts about whether the required supplementary information is presented in accordance with prescribed guidelines. If the entity has presented all or some of the required supplementary information and the accountant did not perform a compilation or review on the required supplementary information, the other-matter paragraph referred to in AR-C 90.126 should include the following elements: A statement that [identify the applicable financial reporting framework] require that the [identify the required supplementary information] be presented to supplement the basic financial statements. A statement that such information, although not a part of the basic financial statements, is required by [identify designated accounting standards-setter], who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. A statement that such information, although not a part of the basic financial statements, is required by [identify designated accounting standards-setter], who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. A statement that the accountant did not perform a compilation, review, or audit on the required supplementary information and does not express an opinion or provide any assurance on the information. If some of the required supplementary information is omitted: A statement that management has omitted [description of the missing required supplementary information] that [identify the applicable financial reporting framework] require to be presented to supplement the basic financial statements. A statement that such missing information, although not a part of the basic financial statements, is required by [identify designated accounting standards-setter], who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. If the measurement or presentation of the required supplementary information departs materially from the prescribed guidelines, a statement that material departures from prescribed guidelines exist [describe the material departures from the applicable financial reporting framework]. If some of the required supplementary information is omitted: A statement that management has omitted [description of the missing required supplementary information] that [identify the applicable financial reporting framework] require to be. A statement that such missing information, although not a part of the basic financial statements, is required by [identify designated accounting standards-setter], who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. If the measurement or presentation of the required supplementary information departs materially from the prescribed guidelines, a statement that material departures from prescribed guidelines exist [describe the material departures from the applicable financial reporting framework]. If the accountant has unresolved doubts about whether the required supplementary information is measured or presented in accordance with prescribed guidelines, a statement that the accountant has doubts about whether material modifications should be made to the required supplementary information for it to be presented in accordance with guidelines established by [identify designated accounting standards-setter]. If all the required supplementary information is omitted, the other-matter paragraph should include the following elements: A statement that management has omitted [description of the missing required supplementary information] that [identify the applicable financial reporting framework] require to be presented to supplement the basic financial statements. A statement that such missing information, although not a part of the basic financial statements, is required by [identify designated accounting standards-setter], who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context.	AR-C 90.129 - .131
Other matter paragraph (other matters)	As applicable	Includes a paragraph within a separate section of the accountant’s report with the heading “Other Matter” or other appropriate heading.	AR-C 90.92
Restricted use paragraph	As applicable	The alert that restricts the use of the accountant’s review report required by AR-C 90.103 should: State that the accountant’s review report is intended solely for the information and use of the specified parties. The alert that restricts the use of the accountant’s review report required by AR-C 90.103 should: State that the accountant’s review report is intended solely for the information and use of the specified parties. Identify the specified parties for whom use is intended. State that the accountant’s review report is not intended to be, and should not be, used by anyone other than the specified parties. State that the accountant’s review report is not intended to be, and should not be, used by anyone other than the specified parties.	AR-C 90.104
Signature	Always	Signature of the accountant or the accountant's firm.	AR-C 90.76h
City and state	Always	City and state where the accountant practices.	AR-C 90.76i
Date of the review report	Always	Date of the review report should be dated no earlier than the date on which the accountant has obtained sufficient appropriate review evidence as the basis for the accountant’s conclusion on the financial statements including being satisfied that: All the statements that the financial statements comprise, including the related notes, have been prepared. Management has asserted that they have taken responsibility for those financial statements.	AR-C 90.76j

Form of the conclusion

Unmodified conclusion

.67 The accountant should express an unmodified conclusion in the accountant’s review report on the financial statements as a whole when the accountant has obtained limited assurance to be able to conclude that nothing has come to the accountant’s attention that causes the accountant to believe that the financial statements are not prepared, in all material respects, in accordance with the applicable financial reporting framework.

.68 When the accountant expresses an unmodified conclusion, the accountant should, unless required by law or regulation, use the following language:

Based on my (our) review, I am (we are) not aware of any material modifications that should be made to the accompanying financial statements for them to be in accordance with [the applicable financial reporting framework].

Modified conclusion

.69 The accountant should express a modified conclusion in the accountant’s review report on the financial statements as a whole when the accountant determines, based on the procedures performed and the review evidence obtained, that the financial statements are materially misstated.

.70 When the accountant modifies the conclusion expressed on the financial statements, the accountant should do the following:

1. Use the heading “Qualified Conclusion” or “Adverse Conclusion,” as appropriate, for the conclusion paragraph in the accountant’s review report.

2. Provide a description of the matter giving rise to the modification, under an appropriate heading (for example, “Basis for Qualified Conclusion,” or “Basis for Adverse Conclusion,” as appropriate), in a separate paragraph in the accountant’s review report immediately before the conclusion paragraph (referred to as the basis for conclusion paragraph).

Financial statements are materially misstated

.71 If the accountant, having obtained sufficient appropriate review evidence, determines, or is otherwise aware, that the financial statements are materially misstated, the accountant should express one of the following: (Ref: par. .A106).

1. A qualified conclusion, when the accountant concludes that the effects of the matter or matters giving rise to the modification are material but not pervasive to the financial statements.

2. An adverse conclusion, when the effects of the matter or matters giving rise to the modification are both material and pervasive to the financial statements.

.72 When the accountant expresses a qualified conclusion on the financial statements because of a material misstatement, the accountant should, unless otherwise required by law or regulation, use the following language:

Based on my (our) review, except for the effects of the matter(s) described in the Basis for Qualified Conclusion paragraph, I am (we are) not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in accordance with [the applicable financial reporting framework].

.73 When the accountant expresses an adverse conclusion on the financial statements, the accountant should, unless otherwise required by law or regulation, use the following language:

Based on my (our) review, due to the significance of the matter(s) described in the Basis for Adverse Conclusion paragraph, the financial statements are not in accordance with [the applicable financial reporting framework].

.74 In the basis for conclusion paragraph, in relation to material misstatements that give rise to either a qualified conclusion or an adverse conclusion, the accountant should do the following:

1. Describe and quantify the financial effects of the misstatement if the material misstatement relates to specific amounts in the financial statements (including quantitative disclosures) and the effects of the departure on the financial statements have been determined by management or are known to the accountant as a result of the accountant’s procedures. If the effects of the departure have not been determined by management or are not known to the accountant as a result of the accountant’s procedures, the accountant is not required to determine the effects of the departure; however, in such circumstances, the accountant should state in the report that such determination has not been made by management.

2. Explain how disclosures are misstated if the material misstatement relates to narrative disclosures.

3. Describe the nature of omitted information if the material misstatement relates to the nondisclosure of information required to be disclosed. The accountant should include the omitted disclosures when practicable to do so.

Reporting on the financial statements

.75 The accountant’s review report should be in writing (Ref: par. .A107–.A109).

Accountant’s review report

.76 The written review report should include the following: (Ref: par. .A123)

1. A title that includes the word independent to clearly indicate that it is the report of an independent accountant for a review engagement (Ref: par. .A110).

2. An addressee, based on the circumstances of the engagement (Ref: par. .A111).

3. An introductory paragraph that (Ref: par. .A112–.A114):

   1. Identifies the entity whose financial statements have been reviewed.

   2. States that the financial statements identified in the report were reviewed.

   3. Identifies the financial statements.

   4. Specifies the date or period covered by each financial statement.

   5. Includes a statement that a review includes primarily applying analytical procedures to management’s (owner’s) financial data and making inquiries of company management (owners).

   6. Includes a statement that a review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole, and that, accordingly, the accountant does not express such an opinion.

4. A section with the heading "Management’s Responsibility for the Financial Statements" that includes an explanation that management is responsible for the preparation and fair presentation of the financial statements in accordance with the applicable financial reporting framework; this responsibility includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement whether due to fraud or error (Ref: par. .A115).

5. A section with the heading "Accountant’s Responsibility" that includes the following statements:

   1. The accountant’s responsibility is to conduct the review engagement in accordance with SSARSs promulgated by the Accounting and Review Services Committee of the AICPA. The accountant’s review report should also explain that those standards require that the accountant perform the procedures to obtain limited assurance as a basis for reporting whether the accountant is aware of any material modifications that should be made to the financial statements for them to be in accordance with the applicable financial reporting framework (Ref: par. .A116–.A118).

   2. The accountant believes that the results of the accountant’s procedures provide a reasonable basis for the accountant’s conclusion.

   3. The accountant is required to be independent of the entity and to meet the accountant’s other ethical responsibilities, in accordance with the relevant ethical requirements relating to the review.

6. A concluding section with an appropriate heading that includes the accountant’s conclusion on the financial statements in accordance with paragraphs .67–.74, as appropriate, and that identifies the country of origin of the financial reporting framework, if applicable.

7. When the accountant’s conclusion on the financial statements is modified:

   1. A paragraph, under the appropriate heading, that contains the accountant’s modified conclusion in accordance with paragraphs .69–.74, as appropriate.

   2. A paragraph, under an appropriate heading, that provides a description of the matter or matters giving rise to the modification (Ref: par. .A119).

8. The signature of the accountant or the accountant’s firm.

9. The city and state where the accountant practices (Ref: par. .A120).

10. The date of the review report, which should be dated no earlier than the date on which the accountant has obtained sufficient appropriate review evidence as the basis for the accountant’s conclusion on the financial statements, including being satisfied that:

    1. All the statements that the financial statements comprise, including the related notes, have been prepared.

    2. Management has asserted that it has taken responsibility for those financial statements (Ref: par. .A121–.A122).

Accountant’s review report on financial statements prepared in accordance with a special purpose framework

.77 The accountant should modify the review report when the accountant becomes aware that the financial statements do not include:

1. A description of the special purpose framework (Ref: par. .A126).

2. A summary of significant accounting policies.

3. An adequate description about how the special purpose framework differs from GAAP. The effects of these differences need not be quantified (Ref: par. .A127).

4. Informative disclosures similar to those required by GAAP when the financial statements contain items that are the same as, or similar to, those in financial statements prepared in accordance with GAAP (Ref: par. .A128).

.78 In the case of financial statements prepared in accordance with the provisions of a contract, the accountant should evaluate whether the financial statements adequately describe any significant interpretations of the contract on which the financial statements are based and modify the review report if the financial statements do not adequately describe any significant interpretations of the contract on which the financial statements are based.

.79 In the case of an accountant’s review report on special purpose financial statements, if management has a choice of financial reporting frameworks in the preparation of the special purpose financial statements, the explanation of management’s responsibility for the financial statements should also make reference to its responsibility for determining that the applicable financial reporting framework is acceptable in the circumstances.

.80 The accountant’s review report on financial statements prepared in accordance with a special purpose framework should include an emphasis-of-matter paragraph, under an appropriate heading, that (Ref: par. .A130–.A131):

1. Indicates that the financial statements are prepared in accordance with the applicable special purpose framework.

2. Refers to the note to the financial statements that describes the framework.

3. States that the special purpose framework is a basis of accounting other than GAAP.

For special purpose financial statements prepared in accordance with a contractual basis of accounting, the emphasis-of-matter paragraph should also state that, as a result, the financial statements may not be suitable for another purpose.

.81 If the special purpose financial statements are prepared in accordance with the contractual basis of accounting, the accountant’s review report should include, in accordance with paragraph.

.104, an other-matter paragraph, under an appropriate heading, that, in accordance with paragraphs .106–.109, restricts the use of the accountant’s review report (Ref: par. .A132).

Comparative financial statements

.82 Comparative financial statements may be required by the applicable financial reporting framework, or management may elect to provide such information. When comparative financial statements are presented, the accountant’s report should refer to each period for which financial statements are presented (Ref: par. .A133–.A134).

Updating the Report

.83 When reporting on all periods presented, a continuing accountant should update the report on one or more prior periods presented on a comparative basis with those of the current period. The accountant’s report on comparative financial statements should not be dated earlier than the date that the accountant completed procedures sufficient to obtain limited assurance as a basis for reporting whether the accountant is aware of any material modifications that should be made to the financial statements for them to be in accordance with the applicable financial reporting framework with respect to the current period (Ref: par. .A135).

.84 When issuing an updated report, the continuing accountant should consider information that the accountant has become aware of during the review of the current period financial statements.

.85 If, during the current engagement, circumstances or events come to the accountant’s attention that may affect the prior-period financial statements presented, the accountant should consider the effects on the review report.

Changed reference to a departure from the applicable financial reporting framework

.86 When the accountant’s report on the financial statements of the prior period contains a changed reference to a departure from the applicable financial reporting framework, the accountant’s review report should include an other-matter paragraph indicating (Ref: par. .A136).

1. The date of the accountant’s previous review report.

2. The circumstances or events that caused the reference to be changed.

3. When applicable, that the financial statements of the prior period have been changed.

Reporting when one period is audited

.87 When the prior period financial statements were audited and the auditor’s report on the prior period financial statements is not reissued, the review report on the current period financial statements should include an other-matter paragraph indicating:

1. That the financial statements of the prior period were previously audited.

2. The date of the auditor’s report on the prior period financial statements.

3. The type of opinion issued on the prior period financial statements.

4. If the opinion was modified, the substantive reasons for the modification.

5. That no auditing procedures were performed after the date of the previous report.

Emphasis-of-matter and other-matter paragraphs in the accountant’s review report

Emphasis-of-matter paragraphs in the accountant’s review report

.89 If the accountant considers it necessary to draw users’ attention to a matter appropriately presented or disclosed in the financial statements that, in the accountant’s professional judgment, is of such importance that it is fundamental to users’ understanding of the financial statements, the accountant should include an emphasis-of-matter paragraph in the accountant’s review report, provided that the accountant has obtained sufficient appropriate review evidence to conclude that the accountant is not aware of any material modifications that should be made to the financial statements with respect to such matter. Such a paragraph should refer only to information presented or disclosed in the financial statements (Ref: par. .A141–.A143).

.90 When the accountant includes an emphasis-of-matter paragraph in the accountant’s review report, the accountant should do the following:

1. Include the paragraph within a separate section of the accountant’s report with the heading "Emphasis of a Matter" or other appropriate heading (Ref: par. .A144–.A145).

2. Include in the paragraph a clear reference to the matter being emphasized and to where relevant disclosures that fully describe the matter can be found in the financial statements. The paragraph should refer only to information presented or disclosed in the financial statements.

3. Indicate that the accountant’s conclusion is not modified with respect to the matter emphasized (Ref: par. .A146).

Other-matter paragraphs in the accountant’s review report

.91 If the accountant considers it necessary to communicate a matter other than those that are presented or disclosed in the financial statements that, in the accountant’s professional judgment, is relevant to the users’ understanding of the review, the accountant’s responsibilities, or the accountant’s review report, the accountant should include an other-matter paragraph in the accountant’s review report.

.92 When the accountant includes an other-matter paragraph in the accountant’s review report, the accountant should include the paragraph within a separate section with the heading "Other Matter" or other appropriate heading (Ref: par. .A141, .A144, and .A147–.A149).

Communication with management

.93 If the accountant expects to include an emphasis-of-matter or other-matter paragraph in the accountant’s review report, the accountant should communicate with management regarding this expectation and the proposed wording of this paragraph. (Ref: par. .A150–.A151).

Correction of a material misstatement in previously issued financial statements

.94 The accountant should include an emphasis-of-matter paragraph in the accountant’s review report when there are adjustments to correct a material misstatement in previously issued financial statements. The accountant should include this type of emphasis-of-matter paragraph in the accountant’s review report when the related financial statements are restated to correct the prior material misstatement. The paragraph need not be repeated in subsequent periods (Ref: par.A152–.A154).

.95 The emphasis-of-matter paragraph should include:

1. A statement that the previously issued financial statements have been restated for the correction of a material misstatement in the respective period.

2. A reference to the entity's disclosure of the correction of the material misstatement (Ref: par. .A155).

.96 If the financial statement disclosures relating to the restatement to correct a material misstatement in previously issued financial statements are not adequate, the accountant should address the inadequacy of disclosure as described in paragraphs .69–.72.

Other reporting responsibilities

.97 An accountant may be requested to address other reporting responsibilities in the accountant’s review report on the financial statements that are in addition to the accountant’s responsibilities in accordance with this section to report on the financial statements. In such situations, those other reporting responsibilities should be addressed by the accountant in a separate section in the accountant’s review report, under the heading “Report on Other Legal and Regulatory Requirements,” or otherwise, as appropriate to the content of the section, following the section of the report titled “Report on the Financial Statements” (Ref: par. .A156).

Alert that restricts the use of the accountant’s review report

.103 An accountant’s review report should include an alert, in a separate paragraph, that restricts its use when the subject matter of the accountant’s review report is based on (Ref: par.A163–.A165):

1. Measurement or disclosure criteria that are determined by the accountant to be suitable only for a limited number of users who can be presumed to have an adequate understanding of the criteria.

2. Measurement or disclosure criteria that are available only to the specified parties.

.104 The alert that restricts the use of the accountant’s review report required by paragraph .103 should:

1. State that the accountant’s review report is intended solely for the information and use of the specified parties.

2. Identify the specified parties for whom use is intended.

3. State that the accountant’s review report is not intended to be, and should not be, used by anyone other than the specified parties (Ref: par. .A166).

Adding other specified parties

.105 When, in accordance with paragraph .103, the accountant includes an alert that restricts the use of the accountant’s review report to certain specified parties and the accountant is requested to add other parties as specified parties, the accountant should determine whether to agree to add the other parties as specified parties (Ref: par. .A167).

.106 If the other parties are added after the release of the accountant’s review report, the accountant should either:

1. Amend the accountant’s review report to add the other parties and, in such circumstances, not change the original date of the accountant’s review report.

2. Provide a written acknowledgment to management and the other parties that such parties have been added as specified parties and state in the acknowledgment that no procedures were performed subsequent to the original date of the accountant’s review report.

The accountant’s consideration of an entity’s ability to continue as a going concern

Implications for the accountant’s review report when substantial doubt exists about the entity’s ability to continue as a going concern

.109 If, after considering conditions or events and management’s plans, the accountant concludes that substantial doubt about the entity’s ability to continue as a going concern for a reasonable period of time remains, the accountant should include a separate section in the accountant’s review report with the heading “Substantial doubt about the entity’s ability to continue as a going concern” that does the following (Ref: par. .A175–.A182):

1. Draws attention to the note in the financial statements that discloses:

   i. The conditions or events identified and management’s plans that deal with these conditions or events.

   ii. That these conditions or events indicate that substantial doubt exists about the entity’s ability to continue as a going concern for a reasonable period of time.

2. States that the accountant’s conclusion is not modified with respect to the matter.

.110 The description in the “Going concern” section about the entity’s ability to continue as a going concern for a reasonable period of time should use terms consistent with those included in the applicable financial reporting framework. The accountant should not use conditional language concerning the existence of substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time (Ref: par. .A181).

.111 If adequate disclosure about an entity’s ability to continue as a going concern for a reasonable period of time is not made in the financial statements, the accountant should do the following:

1. Express a qualified or adverse conclusion, as appropriate, in accordance with paragraphs .71–.74.

2. In the “Basis for qualified (adverse) conclusion” section of the accountant’s review report, state:

   1. Substantial doubt exists about the entity’s ability to continue as a going concern and that the financial statements do not adequately disclose this matter.

   2. Substantial doubt about the entity’s ability to continue as a going concern has been alleviated by management’s plans but the financial statements do not adequately disclose this matter.

Management unwilling to perform or extend its evaluation

.112 If management is unwilling to perform or extend its evaluation to meet the period of time required by the applicable financial reporting framework when requested to do so by the accountant, the accountant should consider the implications for the accountant’s review report (Ref: par. .A123).

Reference to the work of other accountants in an accountant’s review report

.122 If other accountants audited or reviewed the financial statements of significant components, such as consolidated and unconsolidated subsidiaries and investees, and the accountant of the reporting entity decides not to assume responsibility for the audit or review performed by the other accountants, the accountant of the reporting entity should make reference to the review or audit of such other accountants in the accountant’s review report. In that instance, the accountant should clearly indicate in the accountant’s review report that the accountant used the work of other accountants and should include the magnitude of the portion of the financial statements audited or reviewed by the other accountants (Ref: par. .A191–.A193).

.123 Reference to the audit or review of other accountants in the accountant’s review report on the reporting entity should not be made if the other accountants issued an auditor’s or an accountant’s review report that includes an alert that restricts the use of such report.

Determining whether the other accountants are familiar with SSARSs or auditing standards generally accepted in the United States of America, as applicable

.124 Regardless of whether the accountant of the reporting entity decides to make reference to the review or audit of other accountants, the accountant of the reporting entity should communicate with the other accountants and determine the following:

1. The other accountants are aware that the financial statements of the component that the other accountants have audited or reviewed are to be included in the financial statements on which the accountant of the reporting entity will report and that the other accountants’ report thereon will be relied upon and, where applicable, referred to by the accountant of the reporting entity.

2. The other accountants are familiar with the applicable financial reporting framework and with SSARSs or auditing standards generally accepted in the United States of America, as applicable, and will conduct the review or audit in accordance therewith (Ref: par. .A194).

3. The other accountants understand the ethical requirements that are relevant to the engagement and, in particular, are independent. (Ref: par. .A195).

4. A review will be made of matters affecting elimination of intercompany transactions and accounts and, if appropriate in the circumstances, the uniformity of accounting practices among the components included in the financial statements.

Determining whether to make reference when the financial reporting framework is not the same

.125 If the component’s financial statements are prepared using a different financial reporting framework from that used for the financial statements of the reporting entity, reference to the review or audit of the other accountants in the review report of the accountant of the reporting entity should not be made unless the following apply:

1. The accountant has determined that the measurement, recognition, presentation, and disclosure criteria that are applicable to all material items in the component’s financial statements in accordance with the financial reporting framework used by the component are similar to the criteria that are applicable to all material items in the reporting entity’s financial statements in accordance with the financial reporting framework used by the reporting entity.

2. The accountant of the reporting entity has obtained sufficient appropriate review evidence for purposes of evaluating the appropriateness of the adjustments to convert the component’s financial statements to the financial reporting framework used by the reporting entity without the need to assume responsibility for, and thus be involved in, the work of the other accountants (Ref: par. .A196).

Supplementary information that accompanies reviewed financial statements and the accountant’s review report thereon

.126 When supplementary information accompanies reviewed financial statements and the accountant’s review report thereon, the accountant should clearly indicate the degree of responsibility, if any, the accountant is taking with respect to such information in either:

1. An other-matter paragraph in the accountant’s review report on the financial statements.

2. A separate report on the supplementary information.

.127 When the accountant has subjected the supplementary information to the review procedures applied in the accountant’s review of the basic financial statements, the other-matter paragraph in the accountant’s review report on the financial statements or the separate report on the supplementary information should state that (Ref: par. .A198 and .A200):

1. The supplementary information is presented for purposes of additional analysis and is not a required part of the basic financial statements.

2. The supplementary information is the responsibility of management and was derived from, and relates directly to, the underlying accounting and other records used to prepare the financial statements.

3. The supplementary information has been subjected to the review procedures applied in the accountant’s review of the basic financial statements and whether the accountant is aware of any material modifications that should be made to the supplementary information

4. The accountant has not audited the supplementary information and does not express an opinion on such information.

.128 When the accountant has not subjected the supplementary information to the review procedures applied in the accountant’s review of the basic financial statements, the other-matter paragraph in the accountant’s review report on the financial statements or the separate report on the supplementary information should state that (Ref: par. .A199–.A200).

1. The supplementary information is presented for purposes of additional analysis and is not a required part of the basic financial statements.

2. The supplementary information is the responsibility of management.

3. The accountant has not audited or reviewed the supplementary information and, accordingly, does not express an opinion, a conclusion, nor provide any assurance on such information.

Required supplementary information

.129 Concerning the requirement in paragraph .126, with respect to required supplementary information, the accountant should include an other-matter paragraph in the accountant’s review report on the financial statements. The other-matter paragraph should include language to explain the following circumstances, as applicable (Ref: par. .A201):

1. The required supplementary information is included, and the accountant performed a compilation engagement on the required supplementary information.

2. The required supplementary information is included, and the accountant reviewed the required supplementary information.

3. The required supplementary information is included, and the accountant did not perform a compilation, review, or audit on the required supplementary information.

4. The required supplementary information is omitted.

5. Some required supplementary information is missing, and some is presented in accordance with the prescribed guidelines (Ref: par. .A202).

6. The accountant has identified departures from the prescribed guidelines.

7. The accountant has unresolved doubts about whether the required supplementary information is presented in accordance with prescribed guidelines.

.130 If the entity has presented all or some of the required supplementary information and the accountant did not perform a compilation or review on the required supplementary information, the other-matter paragraph referred to in paragraph .126 should include the following elements (Ref: par. .A203):

1. A statement that [identify the applicable financial reporting framework (for example, accounting principles generally accepted in the United States of America)] require that the [identify the required supplementary information] be presented to supplement the basic financial statements.

2. A statement that such information, although not a part of the basic financial statements, is required by [identify designated accounting standards-setter], who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context.

3. A statement that the accountant did not perform a compilation, review, or audit on the required supplementary information and does not express an opinion or provide any assurance on the information.

4. If some of the required supplementary information is omitted:

   i. A statement that management has omitted [description of the missing required supplementary information] that [identify the applicable financial reporting framework (for example, accounting principles generally accepted in the United States of America)] require to be presented to supplement the basic financial statements.

   ii. A statement that such missing information, although not a part of the basic financial statements, is required by [identify designated accounting standards-setter], who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context.

5. If the measurement or presentation of the required supplementary information departs materially from the prescribed guidelines, a statement that material departures from prescribed guidelines exist [describe the material departures from the applicable financial reporting framework].

6. If the accountant has unresolved doubts about whether the required supplementary information is measured or presented in accordance with prescribed guidelines, a statement that the accountant has doubts about whether material modifications should be made to the required supplementary information for it to be presented in accordance with guidelines established by [identify designated accounting standards-setter].

.131 If all the required supplementary information is omitted, the other-matter paragraph should include the following elements:

1. A statement that management has omitted [description of the missing required supplementary information] that [identify the applicable financial reporting framework (for example, accounting principles generally accepted in the United States of America)] require to be presented to supplement the basic financial statements.

2. A statement that such missing information, although not a part of the basic financial statements, is required by [identify designated accounting standards-setter], who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context.

Change in engagement from audit to review

.132 If the accountant, who was engaged to perform an audit engagement in accordance with generally accepted auditing standards, has been requested to change the engagement to a review engagement, the accountant should consider the following before deciding whether to agree to the change (Ref: par. .A204–.A205):

1. The reason given for the request, particularly the implications of a restriction on the scope of the audit engagement, whether imposed by management or by circumstances (Ref: par. .A206).

2. The additional audit effort required to complete the audit engagement.

3. The estimated additional cost to complete the audit engagement.

.133 In all circumstances, if the audit procedures are substantially complete or the cost to complete such procedures is relatively insignificant, the accountant should consider the propriety of accepting a change in the engagement.

.134 If the accountant concludes, based upon the accountant’s professional judgment, that reasonable justification exists to change the engagement, and if the accountant complies with the standards applicable to a review engagement, the accountant should issue an appropriate review report.

.135 The report should not include reference to:

1. The original engagement.

2. Any audit procedures that may have been performed.

3. Scope limitations that resulted in the changed engagement.

.136 When the accountant has been engaged to audit an entity's financial statements and management refuses to allow the accountant to correspond with the entity's legal counsel, the accountant, except in rare circumstances, is precluded from accepting an engagement to review those financial statements.

.A176

Illustration 1

An Accountant’s Review Report Containing an Unmodified Conclusion and Including a Going Concern Section When Management Is Required Under the Applicable Financial Reporting Framework to Include a Statement in the Notes to the Financial Statements That Conditions or Events Have Been Identified and Substantial Doubt Exists and Disclosure in The Financial Statements Is Adequate.

Substantial Doubt About the Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note X to the financial statements, the Company has suffered recurring losses from operations, has a net capital deficiency, and has stated that substantial doubt exists about the Company’s ability to continue as a going concern. Management's evaluation of the events and conditions and management’s plans regarding these matters are also described in Note X. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our conclusion is not modified with respect to this matter.

Illustration 2

An Accountant’s Review Report Containing an Unmodified Opinion Conclusion and Including an Emphasis-of-Matter Paragraph Because Substantial Doubt Has Been Alleviated.

Emphasis of Matter

As discussed in Note X to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency. Management’s evaluation of the events and conditions and management’s plans to mitigate these matters are also described in Note X. Our conclusion is not modified with respect to this matter.