Question

Hint (read chapter 25 of the reference book I shared and other sources in the context of Tanzania)

Jennifer Branson is a new staff auditor on the audit engagement of Greenville Light & Sound, which is a publicly traded company with a calendar year-end. The engagement team has completed its review of the third-quarter financial statements, and the firm has been asked to issue a review report on those statements. As the senior auditor on the engagement, you asked Jennifer to draft the firm’s report for your review.

Here’s what she provided you:

We have examined the accompanying balance sheet of Greenville Light & Sound as of September 30, 2016, and the related statement of operations for the three quarterly periods then ended. A review includes primarily applying analytical procedures to management’s financial data, making inquiries of management, and testing internal controls over financial reporting. A review is substantially less in scope than an audit. These financial statements are the responsibility of the company’s management. We conducted our review in accordance with Statements on Standards for Accounting and Review Services issued by the international Financial Reporting Standard. Those standards require us to perform procedures to obtain assurance that there are no misstatements in the financial statements in order to express our opinion on them. Based on our review, it is our opinion that the financial statements are in accordance with accounting standards generally accepted by the international financial reporting standard for the quarter ended September 30, 2016.

Question

What changes are needed to the report draft provided by Jennifer?

Answer 1

The following are the changes needed to the report :

• The accompanying statement can only be reviewed only but not examined.
• Remove the testing of internal final control as it is not done in limited review.
• Mention that in limited review , we give moderate opinion.
• Disclosure need to done that the accompanying statements are approved by Board of Directors.