Limited Review: Scope and Applications

A limited review primarily involves asking questions to the entity’s management and applying analytical procedures and other review procedures to the financial statements. An annual audit may not be necessary in some cases, but the reviewed entity requires a certain degree of assurance, even if moderate, regarding its annual or interim financial statements.

Common Cases for Conducting a Limited Review:

• Quarterly Reviews for Listed Companies:
  A review is conducted on the interim financial statements of listed companies to provide a moderate level of assurance for the mid-year period.
• Review of Components in a Group Audit:
  A limited review is applied to audit components within a group audit that are not deemed significant.
• Other Circumstances Requiring Moderate Assurance:
  There are other situations that may require moderate assurance for the entity’s annual or interim financial statements.

Purpose of a Limited Review:

The primary goal is to enable the reviewer to conclude whether there is a matter that raises doubt about whether the financial statements present a true and fair view of the company. Since the scope of the review is less extensive than a full audit, the reviewer does not express an opinion on the financial statements. As such, it is not considered part of audit procedures and does not fall under the regulation of audit law.

International Standards for Limited Review:

Internationally, limited reviews are governed by the International Standard on Review Engagements (ISRE) 2400 and 2410. These standards provide comprehensive guidance on the procedures and methods that must be followed to ensure accuracy and credibility.

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