Question

Fully explain 5 similarities and 5 differences between Engagements to Review Historical Financial Statements (CSRE 2400) and an Auditor Review of Interim Financial Statements (7060).

Note you will have to go to the relevant CPA Handbook Sections to provide for a complete answer.

Answer 1

• Both the CSRE2400 and the 7060 reviews follow the same procedures that include an agreement to the engagement terms; they give proper considerations in the materiality of the engagements, the practitioner responds after inquiring about the identified matters, the statement of a conclusion in the financial documents and lastly, the documentation of the involvement.
• While, the engagements have the following differences; the CSRE uses the historical financial statements in that it did not entirely need the involvement of the materiality. The 7060 needs immateriality to check whatever may cause the difference.
• Two, CSRE requires identification of areas where there is a likelihood of misspent, unlike 7060, which does not have the requirements.
• The CSRE needs to tell if the information is enough for analysis, which is not the case with 7060.
• Lastly, the reporting format of CSRE clarifies the responsibilities with old conclusions, while the 7060 has all the details specified in the outcome.