Interim reviews by the entity's auditor: ISRE 2410
How a review of interim financial information by the entity's own auditor under ISRE 2410 differs from an independent review under ISRE 2400 (Revised).
By Achekam · · 5 min read · For Accountants & audit firms in South Africa, Nigeria, Kenya
A client the firm audits each year asks for a review of its half-year figures: the bank wants comfort before extending a facility, or the board wants reviewed results before a dividend. The team sets up a "review engagement", reaches for the independent review template, and starts planning the inquiries a reviewer would make of a client it has never met. That is the wrong starting point. The firm is not a stranger to this client. It is the auditor.
Two International Standards on Review Engagements cover reviews of historical financial information, and the difference between them turns on exactly that point. ISRE 2410 deals with a review of interim financial information performed by the independent auditor of the entity. ISRE 2400 (Revised) deals with reviews of historical financial statements by a practitioner who is not the entity's auditor.
Who performs each kind of review
| ISRE 2410 | ISRE 2400 (Revised) | |
|---|---|---|
| Practitioner | The entity's own auditor | A practitioner who is not the entity's auditor |
| Typical subject | Interim financial information, such as half-year results | Annual financial statements, often where no audit is required |
| Starting knowledge | The understanding obtained in the annual audit | Must be built for the engagement |
| Assurance | Limited, a conclusion expressed negatively | Limited, a conclusion expressed negatively |
Both give limited assurance, and both conclude in the familiar negative form: nothing has come to the practitioner's attention that causes them to believe the information is not prepared, in all material respects, in accordance with the framework. What differs is how the practitioner gets there.
Why the auditor's knowledge changes the work
Under ISRE 2410, the auditor already understands the entity and its environment, including internal control, from the audit of the annual statements. The review updates that understanding through inquiries made during the review, and uses it to decide where to focus.
That has practical consequences:
- Planning is targeted. The auditor knows which balances carried risk at year end, which estimates were contentious and which controls were weak, and can direct inquiries accordingly.
- Changes matter most. The interim review asks what has changed since the last audit: new transactions, new financing, changes in accounting policies, staff turnover in the finance function, new litigation.
- The prior report matters. If the last auditor's report was modified, the review considers whether the matter has been resolved or still affects the interim information.
An independent reviewer under ISRE 2400 (Revised) has none of that background, which is why that standard spends more effort on obtaining an understanding and on designing procedures to address all material items. The procedures for that kind of review are set out in inquiry and analytics in an independent review.
Inquiry and analytics for an interim period
Interim reviews rest on inquiry and analytical procedures, with some other procedures. Typical work includes:
- Reading the minutes of meetings of shareholders, those charged with governance and other committees for the period.
- Inquiring of members of management responsible for financial and accounting matters about significant changes, unusual transactions, estimates and judgements.
- Applying analytical procedures to the interim figures, comparing them with the corresponding period last year, with budgets and with the latest annual statements, and investigating relationships that look unusual.
- Agreeing the interim information to the underlying accounting records.
- Inquiring about events after the interim date, going concern, litigation, fraud and related parties.
- Obtaining written representations from management.
A worked example in words: at the audit the team found that the client's revenue recognition on long service contracts needed adjustment. At the interim review, the auditor asks whether the corrected method has been applied in the half-year figures, compares deferred revenue with the year-end balance and with the order book, and reads the contracts signed during the period. The inquiry is short because the auditor knows exactly what to ask.
The interim review report
The ISRE 2410 report identifies the interim information reviewed, states management's responsibility for it, describes the review and its limits, notes that a review is substantially less in scope than an audit and does not enable the auditor to obtain assurance that they would become aware of all significant matters, and gives the conclusion. Departures from the framework lead to a qualified or adverse conclusion. Where the scope of the review is limited, the auditor communicates the reason in writing to management and those charged with governance and considers whether it is appropriate to issue a report at all.
In Achekam's Studio, the practitioner's report on a set of statements follows the level chosen: audit, independent review, compilation or none. None of these is an ISRE 2410 report, so the wording of an interim review report comes from your firm's methodology and should be checked against the standard's illustrative reports. Similarly, Achekam's exchange for sending a frozen set of statements to another firm supports an independent review under ISRE 2400 (Revised) or an audit, with the reviewer's signed report bound to that version; an ISRE 2410 review is by definition the auditor's own work, not something sent to another firm. When another firm does review your client's statements, see sending statements to another firm for review.
Setting up the engagement and its template
When creating an engagement, staff choose its type, such as annual financial statements compilation, independent review or statutory audit, and a firm can add its own named types. Create a named type for interim reviews rather than borrowing the independent review type, so that the engagement list, the working papers and the reporting are clearly distinct from ISRE 2400 work.
Achekam ships working-paper template packs written in its own words, including packs for ISRE 2400 and ISRE 2410 reviews, for a firm to adopt and approve. The catalogue is marked unapproved platform content until the firm adopts it, and whether a pack is installed on your deployment should be checked in the Methodology Library before you plan around it.
Once the papers exist, the Working Paper Control Centre shows the engagement's file as an index with progress by status, and can group the papers by preparer, reviewer, risk or statement line. On each work item, a step is marked done only with a written response and its documents, or set aside with a reason, and steps are never deleted. For an interim review, the written responses are most of the evidence, so write them as if the reader has not seen the audit file.
The IAASB's page on ISRE 2400 (Revised) describes the standard for reviews by a practitioner who is not the entity's auditor, including the form of the review report, which is the best contrast when deciding which standard applies.
The question to settle first
Before accepting any review, ask one question: are we this entity's auditor? If yes, plan under ISRE 2410 and use what you already know. If no, ISRE 2400 (Revised) applies, and the planning starts from scratch.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
