Virtus Overview: Changes to Review Engagement Standard

The new Canadian Standard for Review Engagements (CSRE) 2400, Engagements to Review Historical Financial Statements, becomes effective for year ends December 31, 2017 and forward.  The new standard was developed to create consistency in the market and to provide clarity about the nature and extent of the work effort put into providing a review engagement report.

This new standard will change some of the communications you've received in past review engagements, as well as some of the questions you'll be asked when we execute our work for you.  The key differences that you will notice include the following:

  • Communication between Virtus Group and you
    • A greater emphasis will be placed on communication with you as management and/or the governing body of all important matters identified during the review.
    • Based on the nature and size of your organization, you may find you're being asked different questions on the elements of your financial statements compared to prior years. The new standard requires that we obtain a more detailed understanding of your business and specifically, your accounting systems, records and procedures.
  • New review engagement report
    • The new review engagement report now summarizes both your responsibility as management and the responsibility of Virtus Group. It also includes a positive statement as to what a review engagement is - a limited assurance engagement - as opposed to merely describing that it is not an audit.  It then provides our conclusion on the financial statements. 
    • In certain circumstances, the review engagement report may contain paragraphs on matters of emphasis and other specific items. 
    • For illustrative purposes, an example of the new unmodified review engagement report can be found here.  
  • New engagement letters
    • We will be obtaining updated engagement letters that reflect the new standard from all clients.

We are working hard at Virtus Group to prepare for the new standard and will be in touch with you as your year end approaches to discuss more specifically how the change will impact your business. If you have any questions in the meantime, please do not hesitate to contact a member of your service team.

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