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Company Independent Reviews: Does a Company Require an Independent Review?

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Company Independent Reviews

Amongst the large variety of services that CFO360 Chartered Accountants and Registered Auditors offers, Company Independent reviews are one of its specialties.
An Independent review is a recent assurance option addition to the Companies Act that provides limited assurance to the users of the financial statements. In this article we will focus on what Independent reviews are, the criteria that determines if an independent review is required, who can perform Independent Reviews and how an Independent review differs from a full Audit.

What is a Company independent review?

An Independent Review is a type of assurance engagement where the independent reviewer provides limited assurance on a set of annual financial statements.
Limited assurance refers to a level of assurance provided to the users of the financial statements that is less than that of a full audit and will normally result in a Negative form of conclusion. Most simply put in general your report will contain a sentence such as the following: “Nothing has come to our attention that causes us to believe that these financial statements are not prepared, in all material aspects, in accordance with…”

What does a Company Independent review entail?

An Independent reviewer applies their professional judgement/skepticism to gather information that will provide an overall understanding of a client to identify any material misstatements. Primarily, analytical procedures will be performed and enquiries will be made to obtain sufficient and appropriate evidence, for items which were identified to have material risks, as the basis for a conclusion on the financial statements as a whole, expressed in accordance with the requirements of ISRE 2400 (Revised).

Independent Review Criteria

Independent reviews are not required for owner managed profit companies but can be performed voluntarily if the public interest score is less than 350 and the financial statements are independently compiled, or if the public interest score is less than 100. However, an Independent Review is required where a company is not owner-managed. In general, if all shareholders are directors, then the entity is owner-managed. In the case of an entity owned by a trust for instance, the definition is not met.

Who can perform independent reviews?


Companies with a public interest score of 100 – 349
Registered Auditors Members of IRBA accredited professional body

Companies with a public interest score of less than 100
Registered Auditors Members of IRBA accredited professional body, Accounting officers

An Independent Reviewer may not conduct an Independent review and be involved in the preparation of the financial statements.

How Independent Reviews differs from Audits

CategoryAuditIndependent Review
CostGreater amount of time is spent therefore cost tends to be higherLess time is spent. Cost tends to be lower.
Level of AssuranceReasonable/high level assurance that financial statements are free from material misstatementsLimited assurance that financial statements are free from material misstatements
Procedures performedIn depth, detailed, and pre-set audit proceduresAnalytical procedures and enquiries
OpinionThe opinion is expressed in a positive form: “the financial statements are free from material misstatements…”The opinion is expressed in a negative form: “nothing has come to our attention that causes us to believe…”

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About the Author:
CFO360 offers comprehensive solutions to simplify matters for your company. Services range from accounting systems and monthly bookkeeping to tax preparation and compliance services. Led by Professional Accountants and servicing hundreds of small businesses they’ve dealt with the many a small business going through a difficult period. Arrange a call with an Accountant to find out more.

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