Standards on Auditing (SAs) apply in “audit of historical financial information" whereas Standards on Review Engagements (SREs) apply in "review of…

Standards on Auditing (SAs) apply in "audit of historical financial information" whereas Standards on Review Engagements (SREs) apply in "review of historical financial information”. Standards on auditing apply in "audit" of historical financial information which is a reasonable assurance engagement whereas Standards on Review Engagements apply in "review" of historical financial information which is a limited assurance engagement only. "Historical financial information means" information expressed in financial terms in relation to a particular entity, derived primarily from that entity's accounting system, about economic events occurring in past time periods or about economic conditions or circumstances at points in time in the past. "Audit" and "review" are two different terms. Audit is a reasonable assurance engagement, and its objective is reduction in assurance engagement risk to an acceptably low level in the circumstances of the engagement. However, “review” is a limited assurance engagement, and its objective is a reduction in assurance engagement risk to a level that is acceptable in the circumstances of the engagement. Standards on Auditing have been issued on wide spectrum of issues in the field of auditing including (but not limited to) overall objectives of independent auditor, audit documentation, planning an audit of financial statements, identifying and assessing risk of material misstatement, audit evidence, audit sampling, going concern and forming an opinion and reporting on financial statements. Some examples of Standards on Auditing are: (i) SA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Standards on Auditing (ii) SA 230 Audit Documentation (iii) SA 315 Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and its Environment (iv) SA 500 Audit Evidence (v) Revised SA 700 Forming an Opinion and Reporting on Financial Statements Examples of Standards on Review engagements are (i) SRE 2400 (Revised) Engagements to Review Historical Financial Statements (ii) SRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity