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FRC’s Response to IAASB’s Proposed International Standard on Review Engagements 2410 (Revised)
EXPOSURE DRAFT OF PROPOSED ISRE 2410 (REVISED), REVIEW OF INTERIM FINANCIAL INFORMATION PERFORMED BY THE INDEPENDENT AUDITOR OF THE ENTITY'S ANNUAL FINANCIAL STATEMENTS
Response Form
Guide for Respondents
Comments are requested by September 3, 2026. Note that requests for extensions of time cannot be accommodated due to the timeline for finalization of this proposed revised standard.
This form is for providing comments on the Exposure Draft of proposed International Standard on Review Engagements™ (ISRE) 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity's Annual Financial Statements (ED-2410), in response to the questions set out in the Explanatory Memorandum (EM) to ED-2410. It also allows for respondent details, demographics and other comments to be provided. Use of this form will facilitate the IAASB's analysis of the responses.
You may respond to all questions or only those questions for which you have specific comments.
To assist our consideration and analysis of your comments, please:
- For each question, start by indicating your overall response using the drop-down menu under each question. Include any detailed comments below that, as indicated.
- When providing comments, respond directly to the questions and:
It is not necessary to include a cover letter containing a summary of your key issues. The response form provides the opportunity to include any other views you wish to place on the public record, should you choose to do so. All responses will be considered a matter of public record and will ultimately be posted on the IAASB website.
Use the "Submit Comment" button on the web page for proposed ISRE 2410 (Revised) to upload the completed form.
Responses to IAASB's Request for Comments in the EM for ED-2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity's Annual Financial Statements
PART A: Respondent Details and Demographic information
| Category | Response |
|---|---|
| Your organization's name (or your name if you are making a submission in your personal capacity) | Financial Reporting Council (UK) |
| Name(s) of person(s) responsible for this submission (or leave blank if the same as above) | Mark Babington |
| Name(s) of contact(s) for this submission (or leave blank if the same as above) | |
| E-mail address(es) of contact(s) | [email protected] |
| Geographical profile that best represents your situation (i.e., the geographical perspective from which are you providing feedback on ED-2410). Select the most appropriate option. | Europe |
| If "Other", please clarify | |
| The stakeholder group to which you belong (i.e., the perspective from which are you providing feedback on ED-2410). Select the most appropriate option. | Regulator or assurance oversight authority |
| If "Other", please specify | |
| Should you choose to do so, you may include information about your organization (or yourself, as applicable). |
Should you choose to do so, you may provide overall views or additional background to your submission. Please note that this is optional. The IAASB's preference is that you incorporate all your views in your comments to the questions (also, Question 16 in Part B allows for raising any other matters in relation to ED-2410).
Information, if any, not already included in responding to the questions in Part B:
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PART B: Responses to Questions in the EM for ED-2410
For each question, please start with your overall response by selecting one of the items in the drop-down list under the question. Provide your detailed comments, if any, below as indicated.
Overall Impact
1Do you agree that ED-2410 is responsive to the public interest, considering the qualitative standard-setting characteristics and the standard-setting actions in the project proposal?
(See Section I-A and the Appendix in the EM)
Overall response: Agree (with no further comments)
Detailed comments (if any):
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2Do you agree that ED-2410 strikes an appropriate balance between the work effort required to express a limited assurance conclusion on the interim review engagement, and more robust requirements in the public interest in certain areas (e.g., going concern, fraud and non-compliance with laws and regulations)? You are invited to include as part of your response insights on the implications or effects of implementing the proposed standard.
Overall response: Agree, with comments below
Detailed comments (if any):
We believe that in general the proposed revisions strike an appropriate balance, reflective of the work effort for a review engagement. There are, however, some matters that require attention that we have identified in responses to the other questions below.
Professional Skepticism and Professional Judgment
3Does ED-2410 appropriately address the foundational concepts of professional skepticism and professional judgment, and the importance of applying these concepts throughout the interim review engagement? If not, what more might be needed in this regard?
(See Section I-B, paragraph 22(a) in the EM)
Overall response: Yes (with no further comments)
Detailed comments (if any):
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Fundamental Principles of an Interim Review Engagement
4Does the Introduction section of ED-2410 provide a clear description of the nature and purpose of an interim review engagement, and how it differs from an audit of financial statements, to provide foundational context for the work effort needed to achieve the objective of the engagement?
(See Section I-B in the EM)
Overall response: Yes (with no further comments)
Detailed comments (if any):
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5Is ED-2410 sufficiently clear that while the auditor performs primarily inquiries and analytical procedures, all procedures performed for the purpose of achieving the overall objective of the interim review engagement are "review procedures"? If not, what suggestions do you have to make this clearer?
(See Section I-F, paras. 44-47 in the EM)
Overall response: Yes (with no further comments)
Detailed comments (if any):
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Approaching an Interim Review Engagement in Accordance with ED-2410
6Is it sufficiently clear that, for recurring engagements, the auditor leverages the knowledge and understanding obtained from previous annual audits and interim review engagements for the entity? If not, what suggestions do you have to make this clearer?
(See Section I-B and Section I-F, paragraphs 44-52 in the EM)
Overall response: Yes (with no further comments)
Detailed comments (if any):
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7Do you agree with the considerations that apply when the review of interim financial information is the first engagement performed for the audit client? If not, what suggestions do you have for additional considerations related to first-time interim review engagements?
(See Section I-F, paras. 48-52 in the EM)
Overall response: Disagree, with comments below
Detailed comments (if any):
We agree that the underlying principles of ED 2410 apply irrespective of whether the auditor has previously audited the entity's annual financial statements or is newly appointed. However, we disagree with the elimination of the requirement in paragraph 17 of the extant standard that 'In order to plan and conduct a review of interim financial information, a recently appointed auditor, who has not yet performed an audit of the annual financial statements in accordance with ISAs, shall obtain an understanding of the entity and its environment, including its internal control, as it relates to the preparation of both annual and interim financial information.' We believe it is important to emphasise this with a requirement, rather than to address it solely in application material.
Materiality
8Do you agree with the requirement for the auditor to determine materiality for the interim review engagement, and the related application material that describes the relevant principles that apply? If not, what would you suggest?
(See Section I-F, paragraphs 41-43 in the EM)
Overall response: Agree, with comments below
Detailed comments (if any):
We agree with the requirement for the auditor to determine materiality for the interim financial information as a whole. However, consistent with the requirements for an audit, the auditor should also be required to determine whether, in the specific circumstances of the entity, there are one or more particular classes of transactions, account balances or disclosures for which misstatements of lesser amounts than materiality for the financial information as a whole could reasonably be expected to influence the economic decisions of users taken on the basis of the interim financial information.
Group Interim Review Engagements
9Overall, do you agree that ED-2410 is capable of being applied for the review of interim financial information of groups? If not, please explain your reasons, and provide suggestions for additional requirements or application material that might be needed.
(See Section I-F, paragraphs 37-40 in the EM)
Overall response: Agree, with comments below
Detailed comments (if any):
Notwithstanding the requirement in paragraph 94(a), it would be helpful if the requirement in paragraph 40 included communication about the relevant ethical requirements, including those related to independence, component auditors should be aware of.
10Are the requirements in ED-2410 that address specific considerations related to group interim review engagements appropriate? If not, please explain your reasons, and provide suggestions for additional requirements or application material that might be needed.
(See Section I-F, paragraphs 37-40 in the EM)
Overall response: Yes (with no further comments)
Detailed comments (if any):
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Fraud and Non-Compliance with Laws and Regulations (NOCLAR)
11Do you agree that the work effort requirements related to fraud and NOCLAR are appropriate and proportionate to the circumstances of an interim review engagement, recognizing that the engagement is performed by the auditor of the entity's annual financial statements and has responsibilities related to fraud and NOCLAR in the context of that engagement? If not, please explain your reasons, and provide suggestions for the auditor's approach to fraud and NOCLAR in an interim review engagement.
(See Section I-F, paras. 54-56 in the EM)
Overall response: Agree (with no further comments)
Detailed comments (if any):
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Going Concern
Questions 12 and 13 below address both the auditor's work effort related to going concern in an interim review engagement and transparency about going concern in the interim review report.
12Do you agree that the work effort requirements related to going concern are appropriate and proportionate to the circumstances of an interim review engagement, recognizing that the engagement is performed by the auditor of the entity's annual financial statements and has responsibilities related to going concern in the context of that engagement? If not, please explain your reasons and provide suggestions for how ED-2410 should address the auditor's responsibilities related to going concern in an interim review engagement.
(See Section I-F, paras. 57-61 in the EM)
Overall response: Neither agree/disagree, but see comments below
Detailed comments (if any):
We are supportive of the enhanced attention to going concern in ED 2410. However, inquiry is the primary form of work effort driven by the proposed requirements in relation to identifying whether there is an issue in relation to going concern. We are concerned that the revised standard pays insufficient attention to the auditor considering the reasonableness of the responses received. It is only if the auditor becomes aware of events or conditions that may cast significant doubt on the entity's ability to continue as a going concern that appears to prompt the auditor to go beyond making inquiries – for example, considering the feasibility of management's plans, as per paragraph 63(b)(i).
However, if the responses to inquiries made by the auditor do not indicate possible doubts about the entity's ability continue as a going concern, it is important that they are not accepted without critical evaluation. The auditor should consider whether the responses received, and the information upon which they are based, are consistent with the auditor's own understanding of the entity and its environment, and changes that the auditor is aware of since the previous audit.
For example, the auditor might be aware of external factors that are significantly increasing costs and / or supply problems of essential inputs for a client's business sector. If the responses to the auditor's inquiries do not acknowledge or address those factors, the auditor should follow up to ascertain why they do not and consider whether the answers received from the entity are reasonable.
We recommend that paragraph 45 (inquiries of management and others) also include specific material on going concern. For example, the following could be inserted between (c) and (d):
"The basis for the intended use of the going concern basis of accounting, whether events or conditions exist that, individually or collectively, may cast significant doubt on the entity's ability to continue as a going concern and, if so, management's plans to address them."
This would support the more detailed requirements in paragraphs 58 to 65.
13Do you agree with the proposals to introduce a new separate section relating to going concern in the auditor's interim review report? If not, please explain your reasons and provide suggestions for how ED-2410 should address transparency about going concern in the interim review report.
(See Section I-H, paragraphs 74-79 in the EM)
Overall response: Agree (with no further comments)
Detailed comments (if any):
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In particular:
- aDo you agree with the proposed required statements, appropriately worded for a limited assurance engagement, relating to the going concern basis of accounting and whether a material uncertainty exists? If not, please explain your reasons and provide suggestions for how such statements should be worded in the interim review report.
Overall response: Agree (with no further comments)
Detailed comments (if any):
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- bDo you agree that the circumstances addressed in the requirements in paragraphs 108-111 of ED-2410 capture the most frequently encountered scenarios in practice? If not, please explain your reasons and provide suggestions for any other scenarios that should be addressed in ED-2410.
Overall response: Agree (with no further comments)
Detailed comments (if any):
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- cDo you agree with the requirement in paragraph 111 of ED-2410 to include a reference in the interim review report to disclosure(s) of a going concern matter, other than a material uncertainty (for example, a “close call”) only when the matter is, in the auditor's professional judgment, of such importance that it is fundamental to users' understanding of the interim financial information, and to do so in a manner akin to an emphasis of matter paragraph? If not, please explain your reasons and provide suggestions for how such matters should be addressed in ED-2410.
Overall response: Agree (with no further comments)
Detailed comments (if any):
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The Auditor's Interim Review Report
General
14Do you agree with the proposed new structure of the auditor's interim review report? In particular, consider whether the new structure may be clearer for intended users of the report since it is consistent with the structure of the auditor's report on the financial statements. If not, please explain your reasons, including any suggestions for how the interim review report can be made clearer for intended users.
(See Section I-H, paragraphs 65-68 in the EM)
Overall response: Agree, with comments below
Detailed comments (if any):
We are generally supportive of the proposed new structure of the auditor's interim review report. However, the statement that the level of assurance obtained is substantially lower than in an audit should have more prominence than it does in the illustrative review reports. This is a critical feature to bring to the attention of the users of the review report, but its position at the end of the lengthy first paragraph in the illustrative Basis for Conclusion does not give it sufficient emphasis. Ideally it would be closer to the actual conclusion paragraph, as it is in ISRE 2400, but we appreciate that is difficult to achieve when seeking to follow a similar structure for an auditor's report on annual financial statements.
Nonetheless, we believe that more emphasis could be achieved. In ISRE 2400, there are three illustrative paragraphs, under the heading 'Practitioner's Responsibility', that cover the main points addressed in the single illustrative first Basis for Conclusion paragraph included in ED 2410. The presentation in ISRE 2400 helps each of the points stand out more than they do in ED 2410. Accordingly, we recommend that the points in the ED 2410 illustrative Basis for Conclusion first paragraph are similarly covered by separate paragraphs. Such a presentation would better reflect the structure of the requirement in paragraph 95(d).
The Auditor's Interim Review Conclusion
15Do you foresee any practical consequences from the approach in ED-2410 that the auditor's interim review conclusion would differ, depending on whether the applicable financial reporting framework is a fair presentation framework or a compliance framework, as defined in paragraph 13(b) of ED-2410? Please be as specific as possible in describing any potential issues and suggestions for how the IAASB may address them.
(See Section I-H, paragraphs 69-73 in the EM)
Overall response: No (with no further comments)
Detailed comments (if any):
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Other Matters
16Are there any other matters you would like to raise in relation to ED-2410? If so, please clearly indicate the specific paragraph numbers of any requirements, application material, or Appendix, to which your comments relate. If you provide views on other matters, please use subheadings in your response to clearly identify and distinguish different matters.
Overall response: Yes, as further explained below
Detailed comments (if any):
Definition of other information
We recommend the definition of 'other information' is simplified to 'Information that is not subject to the interim review engagement and is included in in a document containing the interim financial information and the auditor's interim review report thereon.' Specific references in the definition in the ED to information included by 'law, regulation or custom' are not required. There is also a lack of clarity as to what is meant by 'custom'. Our recommendation seeks to avoid the risk that what might be considered significant information is excluded from the scope of the standard on the basis that it is not customary information (e.g. it is information relating to a one-off matter). Such a simplified definition would also be more consistent with the definition set out in ISA 720.
Preconditions – obtaining the agreement of management
Paragraph A51 includes the statement that 'The auditor may obtain management's agreement either orally or in writing, but management's agreement is subsequently recorded within the written terms of the engagement'. Given that the agreed terms of engagement are required to be recorded in an engagement letter or other suitable form of written agreement, it would be clearer if that statement in paragraph A51 was shortened to 'Management's agreement is recorded within the written terms of the engagement'.
Form and content of the engagement letter - management's assessment of going concern
We recommend that the matters an engagement letter may address listed in paragraph A56 also includes 'The expectation that management will provide a going concern assessment that covers a period of at least twelve months from the date of approval of the interim information'. This would reflect the expectation that is established by the requirements in paragraphs 58-60. It would also be consistent with the conforming amendments to the application material in ISA 210 that come into effect at the same time as ISA 570 (Revised 2024).
Wording of interim review report prescribed by law or regulation
Paragraph 32 requires that if additional wording in the auditor's interim review report cannot mitigate possible misunderstandings from using the wording prescribed by law or regulation the auditor 'shall not accept the the engagement, unless required by law or regulation to do so.' It is likely that, where law or regulation prescribes a layout or wording, there will be an expectation of such engagements being performed. Rather than seeking to prohibit an auditor from accepting such an engagement, we recommend that paragraph 32 is edited to read 'If the auditor concludes that additional explanation in the auditor's interim review report cannot mitigate such a possible misunderstanding, the auditor shall not accept the interim review engagement engagement, unless required by law or regulation to do so. An interim review engagement conducted in accordance with such law or regulation does not comply with this ISRE. Accordingly ...'. This makes clear that the ISRE cannot be misused and avoids any perception that it is extending the IAASB's remit to a matter that is more appropriate for regulatory bodies to address.
Additional procedures when the auditor becomes aware that the interim financial information may be materially misstated
In paragraph A122 it would be helpful to be clear that the auditor is not required to perform audit equivalent procedures designed to obtain 'reasonable assurance'.
Inability to obtain sufficient appropriate evidence
It should be clearer in the actual requirements, without needing reference to paragraph A171, that the requirement in paragraph 103 [express a qualified or disclaimer of opinion] is subject to the requirement in paragraph 105 [if the inability to obtain sufficient appropriate evidence is due to a limitation imposed by management, withdraw from the engagement if possible]. As presented it could be read that a qualified / disclaimer of opinion is given followed by withdrawal if possible (bearing in mind these are ordinarily recurring engagements). It could also be clearer that, if a limitation is being imposed by management, the auditor should communicate with those charged with governance as that might help get the imposed limitation removed. It is not obvious that this might be addressed by the communication requirement in paragraph 38.
Taking overall responsibility for managing and achieving quality
Paragraph A145 suggests that an indicator that the engagement partner may not have been sufficiently and appropriately involved may include 'lack of timely review of the risk assessment procedures performed ...'. Paragraph A72 includes that statement that 'This ISRE does not require the identification and assessment of the risks of material misstatement of the interim financial information' but it does identify that the risk assessment procedures performed for the audit inform the auditor's identification of areas in the interim financial information where material misstatements are likely to arise. It would be helpful if paragraph A145 was amended to better reflect the guidance in paragraph A72.
Comparative Information
Paragraph 119 should also require the auditor to consider whether appropriate adjustments and disclosures have been made if: the comparative information does not agree with the prior period; or the accounting policies reflected in the comparative information are not consistent with those applied in the current period.
Translations
17Recognizing that many respondents may intend to translate the final standard for adoption in their own environments, have you identified any potential translation challenges or issues?
If so, please describe the issue identified and clearly indicate the specific paragraph numbers of any requirements, application material, or specific illustrations or appendices to which your comments relate.
Overall response: No response
Detailed comments (if any):
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Effective Date
18The IAASB believes that an appropriate implementation period would be approximately 18 months after the expected date of approval of the proposed revised standard. Do you agree that this will provide a sufficient period to support effective implementation of the proposed standard? If not, what do you propose and why?
(See Section I-I, paragraphs 85-86 in the EM)
Overall response: Agree (with no further comments)
Detailed comments (if any):
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Questions to Inform the International Ethics Standards Board for Accountants (IESBA)
The IESBA is seeking views from respondents related to the application of the IESBA Code. Respondents for whom these questions are relevant are encouraged answer these questions to inform the IESBA's consideration of the need for any future actions.
(See the Introduction, paragraphs 12-14, and Section I-C in the EM)
Group Interim Review Engagements
E.1.aRecognizing that ED-2410 requires the auditor to comply with relevant ethical requirements, including those related to independence, when performing an interim review engagement:
Given the context set out in Section I-C, paragraph 28, in the EM and taking into account that Part 4A of the Code applies to both audit and review engagements unless otherwise stated, do you believe there is a need to clarify the application of Section 405 with respect to group review engagements, including group interim reviews? If so, please explain why. Also explain what clarifications would be useful and whether they should be made inside or outside the Code.
Overall response: No, with comments below
Detailed comments (if any):
Section 405 can be applied as is for engagements to review group interim financial information. Paragraph 400.2 of Part 4A of the Code states 'This Part applies to both audit and review engagements unless otherwise stated. The terms "audit", "audit team", "audit engagement", "audit client", and "audit report" apply equally to review, review team, review engagement, review client, and review engagement report." The Glossary entry for the term 'audit', states 'In Part 4A, the term “audit” applies equally to "review".' As Section 405 does not include an explicit statement that it does not apply to reviews it follows that, as indicated by 400.2 and the Glossary, the term 'audit' used therein can be inferred to mean 'review'.
The two communication requirements within Section 405 that refer to ISA 600, and the further references in the application material, indicate how some specific requirements of that ISA can be addressed but they do not preclude Section 405 from being applied to interim reviews. The other requirements in Section 405 have no specific references to ISA 600.
If, having regard to all the responses received to this consultation, the IESBA concludes that clarification is necessary, the edits made in the corresponding paragraphs of new Section 5405 (for group sustainability assurance engagements) illustrate how the references to ISA 600 could be eliminated and the requirements and application material written to apply more generally. If specific references to ISA 600 are still believed appropriate they could be addressed in footnotes or presented as examples in the application material.
Non-compliance or Suspected Non-compliance with Laws and Regulations
E.1.bRecognizing that ED-2410 requires the auditor to comply with relevant ethical requirements, including those related to independence, when performing an interim review engagement:
Do you believe the application of the Code as described in Section I-C, paragraph 29, in the EM is clear when information concerning non-compliance or suspected non-compliance with laws and regulations comes to the auditor's attention when performing an interim review engagement? If not, please explain why. Also explain what clarifications would be useful and whether they should be made inside or outside the Code.
Overall response: Yes, with comments below
Detailed comments (if any):
The provisions in R360.10 to 360.28 A1 apply regardless of how the professional accountant engaged to perform an audit of financial statements becomes aware of non-compliance or suspected non-compliance with laws and regulations. They are not restricted to awareness obtained in the performance of the audit. Ordinarily the professional accountant performing an audit engagement for a client will be the same professional accountant who performs the interim review engagement in accordance with ISRE 2410 for that client but, even if they are not, they should become informed by virtue of the communication requirement pursuant to R360.31(a).
Accordingly, we agree with the view of the IESBA staff set out in the Explanatory Memorandum that, in practice, there should ultimately be no divergence in how the firm would respond to the NOCLAR or suspected NOCLAR in the context of the interim review engagement vs, in the context of the audit engagement. There is no need for Section 360 to be amended to refer specifically to interim review engagements performed by the auditor of entity's financial statements.
This document was prepared by the Staff of the International Auditing and Assurance Standards Board (IAASB).
The objective of the IAASB is to serve the public interest by setting high-quality auditing, assurance, and other related services standards and by facilitating the convergence of international and national auditing and assurance standards, thereby enhancing the quality and consistency of practice throughout the world and strengthening public confidence in the global auditing and assurance profession.
The IAASB develops auditing and assurance standards and guidance under a shared standard-setting process involving the Public Interest Oversight Board, which oversees the activities of the IAASB, and the IAASB Stakeholder Advisory Council, which provides public interest input into the development of the standards and guidance.
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