SPECIALIZED AREAS

SECTION 7060
auditor review of interim financial statements
(Effective for reviews of interim financial statements for interim periods of fiscal years beginning on or after December 15, 2014)

CONTENTS

Paragraph

Introduction

Scope of this Section

Effective Date

Objective

Requirements

Agreeing the Terms of Engagement

4-5

Communication with the Audit Committee

Performing the Engagement

7-19

The Auditor's Interim Review Report

20-26

Additional Communication Responsibilities

27-30

Subsequent Discovery of a Possible Material Misstatement

31-32

Documentation

33-34

Application and Other Explanatory Material

Scope of this Section

A1-A5

Objective

A6-A7

Agreeing the Terms of Engagement

A8-A9

Communication with the Audit Committee

A10

Performing the Engagement

A11-A32

The Auditor's Interim Review Report

A33-A37

Additional Communication Responsibilities

A38-A39

Subsequent Discovery of a Possible Material Misstatement

A40-A42

Documentation

A43-A45

Appendix 1: Example of an Interim Review Engagement Letter

Appendix 2: Examples of Interim Review Procedures

Appendix 3: Example of a Representation Letter

Appendix 4: Illustrations of Auditor's Interim Review Reports

Introduction
Scope of this Section

1.

This Section deals with the interim review of an entity's interim financial statements by its auditor (an "interim review"). The
purpose of an engagement under this Section is to assist the audit committee in discharging its responsibilities with
respect to interim financial statements that are to be issued under the provisions of securities legislation. (Ref: Para. A1A5)

Effective Date
2.

This Section is effective for reviews of interim financial statements for interim periods of fiscal years beginning on or after
December 15, 2014.

Objective
3.

The objective of the auditor is to obtain a basis for reporting to the audit committee as to whether the auditor is aware of any
material modification that should be made to the interim financial statements for those statements to be in accordance
with the applicable financial reporting framework. (Ref: Para. A6-A7)

Requirements
Agreeing the Terms of Engagement
4.

The auditor shall agree the terms of the engagement with management and the audit committee prior to performing the
engagement.

5.

The agreed terms of the engagement shall be recorded in an engagement letter or other suitable form of written agreement
and shall include:
(a)

The objectives and scope of the engagement;

(b)

The responsibilities of management and the audit committee;

(c)

The responsibilities of the auditor;

(d)

Reference to the expected form and content of the auditor's interim review report; and

(e)

A statement that a written auditor's interim review report will accompany the interim financial statements if:
(i)

The auditor's interim review is to be referred to in any public document; or

(ii)

The auditor's interim review report contains a modified conclusion relating to a departure from the
applicable financial reporting framework, unless the departure from the applicable financial reporting
framework is a result of an exemption permitted by securities regulations. (Ref: Para. A8-A9)

Communication with the Audit Committee

6.

The auditor shall communicate to the audit committee, on a timely basis, all matters concerning the interim review that, in the
auditor's professional judgment, are of sufficient importance to merit the attention of the audit committee. (Ref:
Para. A10)

Performing the Engagement

Materiality
7.

The auditor shall consider materiality with reference to the applicable financial reporting framework as it relates to the interim
financial statements to assist in determining the nature and extent of the procedures to be performed, and evaluating the
effect of misstatements. (Ref: Para. A11-A12)

Understanding the Entity and Its Environment, Including Its Internal Control
8.

The auditor shall have a sufficient understanding of the entity and its environment, including internal control as it relates to the
preparation of both annual and interim financial statements, to be able to provide a basis to identify the risks that are
likely to result in the need for material modification to the interim financial statements for those statements to be in
accordance with the applicable financial reporting framework. (Ref: Para. A13-A15)

Designing and Performing Procedures

9.

10.

The auditor shall design and perform inquiries and analytical procedures to focus on addressing the identified risks that are
likely to result in the need for material modification to the interim financial statements for those statements to be in
accordance with the applicable financial reporting framework. (Ref: Para. A16-A21)
The auditor's inquiries of officials having responsibility for financial and accounting matters shall include the existence of any
actual, suspected or alleged:
(a)

Fraud or illegal acts affecting the entity; and

(b)

Non-compliance with provisions of laws and regulations that are generally recognized to have a direct effect on the
determination of material amounts and disclosures in the interim financial statements. (Ref: Para. A22)

Procedures to Address Specific Circumstances

Going Concern
11.

If, through the auditor's understanding of the entity and its environment or during the performance of the interim review, the
auditor becomes aware of events or conditions that may cast significant doubt on the entity's ability to continue as a
going concern, the auditor's procedures shall include:
(a)

Inquiries of management about:

(i)

Whether management has identified any material uncertainty;

(ii)

Plans for future actions affecting the entity's ability to continue as a going concern;

(iii) The feasibility of those plans; and

(iv) Whether management believes the outcome of those plans will improve the situation regarding the entity's
ability to continue as a going concern;
(b)

Consideration of management's responses in light of all relevant information of which the auditor is aware; and

(c)

Evaluation of whether management's responses provide an appropriate basis to:

(i)

Support the preparation of the interim financial statements on a going concern basis; and

(ii)

Conclude whether the interim financial statements are materially misstated, or are otherwise misleading,
as a result of inadequate disclosure with respect to a material uncertainty related to events or
conditions that may cast significant doubt on the entity's ability to continue as a going concern.

Interim Management Discussion and Analysis

12.

The auditor shall read the information contained in the interim Management Discussion and Analysis and consider whether
such information is materially inconsistent with the interim financial statements. If the auditor identifies an inconsistency
that indicates that there may be a material misstatement in the interim financial statements, the auditor shall determine
what effect, if any, the inconsistency has on the interim financial statements. The auditor may also become aware of
information that indicates that there may be a misrepresentation in the interim Management Discussion and Analysis. If
the auditor becomes aware of such information, the auditor shall discuss the matter with management and, where
appropriate, the audit committee or the board of directors and, if necessary, take further action based on the auditor's
professional judgment. (Ref: Para. A22A-A26)

Written Representations
13.

The auditor shall obtain written representations from management that:

(a)

The interim financial statements for the period(s) under review are prepared in accordance with the applicable
financial reporting framework;

(b)

The interim financial statements include appropriate disclosure and accounting treatment of events occurring
subsequent to the most recent date of the statement of financial position;

(c)

Management is responsible for such internal control as management determines is necessary to enable the
preparation of the interim financial statements that are free from material misstatement, whether due to fraud or
error;

(d)

The effects of any uncorrected misstatements identified by the auditor are immaterial, both individually and in the
aggregate, to the interim financial statements for the period(s) under review;

(e)

Management has provided access to all information of which management is aware that is relevant to the
preparation of the interim financial statements such as records, documentation and other matters; and

(f)

Management has disclosed to the auditor any knowledge of actual, suspected or alleged fraud or illegal or possibly
illegal acts affecting the entity.

The auditor shall also obtain such additional representations as are appropriate. (Ref: Para. A27-A28)
14.

The date of the written representations shall be as near as practicable to, but not after, the date of the auditor's interim
review report.

Additional Procedures
15.

If the auditor becomes aware of a matter that represents a possible misstatement that is not clearly trivial, the auditor shall
perform additional procedures to resolve the matter. (Ref: Para. A29)

Accumulation and Evaluation of Misstatements

16.

The auditor shall accumulate misstatements identified during the interim review, other than those that are clearly trivial, and:
(a)

Evaluate misstatements, both individually and in the aggregate (including inadequate disclosure), to determine
whether any material modification needs to be made to the interim financial statements for them to be in
accordance with the applicable financial reporting framework; and

(b)

Communicate the effect of those misstatements to management and the audit committee. (Ref: Para. A30)

Resolution of Matters
17.

If the auditor concludes that the accumulated misstatements would result in the need for any material modification to the
interim financial statements for them to be in accordance with the applicable financial reporting framework, the auditor
shall discuss the matter with the appropriate level of management as soon as practicable. If, in the professional judgment
of the auditor, management does not respond appropriately, the auditor shall inform the audit committee of the matter as
soon as practicable. (Ref: Para. A31)

18.

If, in the professional judgment of the auditor, the audit committee does not respond appropriately with respect to a matter as
described in paragraph 17, the auditor shall determine whether to:

19.

(a)

Express a modified conclusion in the auditor's interim review report (see paragraphs 22-24); or

(b)

Resign from the interim review engagement. (Ref: Para. A32, A39)

If the auditor is unable to complete the interim review, the auditor shall not issue an auditor's interim review report and shall
communicate to the audit committee as soon as practicable:
(a)

That the auditor is unable to complete the interim review and the reasons therefor;

(b)

That an incomplete interim review is not an adequate basis for reporting and, accordingly, the auditor is precluded
from providing an auditor's interim review report; and

(c)

If applicable, any material modification of which the auditor has become aware that the auditor believes needs to
be made to the interim financial statements for them to be in accordance with the applicable financial reporting
framework.

The Auditor's Interim Review Report

Form and Content of the Auditor's Interim Review Report
20.

The auditor's interim review report, whether written or oral, shall include the following:
(a)

An addressee (normally the audit committee);

(b)

Identification of the interim financial statements reviewed;

(c)

A statement that the interim financial statements are the responsibility of the entity's management;

(d)

A statement that the review of the interim financial statements was performed in accordance with Canadian
generally accepted standards for a review of interim financial statements by an entity's auditor;

(e)

A statement that an interim review is substantially less in scope than an audit, whose objective is an expression of
opinion regarding the financial statements, and that accordingly, no such opinion is expressed;

(f)

A statement that an interim review does not provide assurance that the auditor would become aware of any or all
significant matters affecting the interim financial statements that might be identified in an audit;

(g)

A statement about whether the auditor is aware of any material modification that needs to be made for the interim
financial statements to be in accordance with the applicable financial reporting framework;

(h)

A statement restricting the use of the report to the addressee for its assistance in reviewing the interim financial
statements;

(i)

The date of the report; and

(j)

The name of the auditor. (Ref: Para. A33-A35)

Written Consent to the Inclusion of the Auditor's Interim Review Report in a Public Document
21.

An auditor shall not issue a written consent to the inclusion of the auditor's interim review report in a public document, unless
the written consent is required, pursuant to securities legislation, to the use of the auditor's interim review report on
financial statements included in a prospectus. (Ref: Para. A36)

Modified Conclusion
22.

23.

24.

If the auditor concludes that any material modification is necessary for the interim financial statements to be in accordance
with the applicable financial reporting framework, the auditor shall express:
(a)

A qualified conclusion, when the auditor concludes that the effects of the matter(s) giving rise to the modification
are material, but not pervasive to the interim financial statements; or

(b)

An adverse conclusion, when the auditor concludes that the effects of the matter(s) giving rise to the modification
are both material and pervasive to the interim financial statements.

If the auditor's interim review report contains a modified conclusion, the report shall:
(a)

Describe the nature of the departure(s) from the applicable financial reporting framework; and

(b)

If readily determinable, state the effects of the departure(s) on the interim financial statements.

If the auditor's interim review report contains a modified conclusion, the auditor shall issue a written auditor's interim review
report. In addition, the auditor shall request that the written auditor's interim review report accompany the interim financial
statements, unless the matter(s) giving rise to the modification is a result of an exemption permitted by securities
regulations.

Comparative Figures and Additional Information in the Auditor's Interim Review Report
25.

When comparative figures:

(a)

Are based on information reported on by another auditor or practitioner; or

(b)

Were neither audited nor reviewed,

the entity's auditor shall communicate such matters in the auditor's interim review report. (Ref: Para. A37)
26.

If the auditor expands the auditor's interim review report to include information and explanations not intended as a modified
conclusion, the additional information and explanations shall follow the statement as set out in paragraph 20(g). (Ref:
Para. A37)

Additional Communication Responsibilities

27.

If management has indicated its intention to:

(a)

Include reference in a public document containing the interim financial statements to the auditor having reviewed
the interim financial statements; or

(b)

Issue interim financial statements on which the entity's auditor has expressed a modified conclusion in the auditor's
interim review report (except when such modification relates to a departure from the applicable financial
reporting framework that is a result of an exemption permitted by securities regulations),

the auditor shall advise management that the auditor's written interim review report must accompany the interim financial
statements.

28.

If management will not agree to the auditor's interim review report accompanying the interim financial statements, the auditor
shall inform the audit committee or board of directors of management's refusal. If the matter is not resolved to the
auditor's satisfaction, the auditor shall:
(a)

Notify the audit committee or board of directors that the auditor does not consent to the use of the auditor's name
in connection with the interim financial statements and, if applicable, the public document containing the interim
financial statements; and

(b)

Consider whether to resign from the engagement. (Ref: Para. A32, A39)

29.

If the auditor becomes aware that the interim financial statements or a public document containing interim financial
statements were released without the auditor's interim review report in the circumstances contemplated in paragraph 27,
the auditor shall take actions to resolve the matter. (Ref: Para. A38-A39)

30.

If an entity represents in a public document that the auditor has reviewed the interim financial statements included in the
document when the auditor has not completed the interim review, the auditor shall:
(a)

Inform the audit committee or board of directors that the auditor has not performed an interim review within the
scope of this Section;

(b)

Notify the audit committee or board of directors that the auditor does not consent to the use of the auditor's name
in the public document; and

(c)

Consider whether to resign from the engagement. (Ref: Para. A32, A39)

Subsequent Discovery of a Possible Material Misstatement

31.

If, after issuing the auditor's interim review report, the auditor becomes aware of a possible material misstatement in the
interim financial statements that might have affected the auditor's interim review report had the auditor known about it,
the auditor shall take appropriate actions to resolve the matter. (Ref: Para. A40-A41)

32.

When interim financial statements that were reported on in writing are revised because of a material misstatement, the
auditor's interim review report on the revised statements shall be clearly differentiated from the original report. (Ref:
Para. A42)

Documentation
33.

The auditor shall document matters that, in the auditor's professional judgment, are important to support the auditor's interim
review report. (Ref: Para. A43)

34.

The documentation shall include, at a minimum:

(a)

Any findings or issues that, in the auditor's judgment, are significant;

(b)

Sufficient details to enable members of the engagement team with supervision and review responsibilities to
understand the nature, timing and extent of the interim review procedures and results of performing those
procedures;

(c)

The identity of the engagement team members who performed and reviewed the work; and

(d)

Communication with the audit committee, regardless of whether the communication was made in writing or orally.
(Ref: Para. A44-A45)
*****

Application and Other Explanatory Material

Scope of this Section (Ref: Para. 1)
A1.

The term "auditor" is used in this Section because the scope of the Section is limited to circumstances when the auditor of
the entity is engaged to perform an interim review of the entity's interim financial statements. However, the auditor is not
performing an audit of those interim financial statements.

A2.

The term "audit committee" is used in this Section because, in most cases, this is the party to which the auditor is providing
assistance. However, on occasion, the auditor may be engaged by the board of directors or by another body within the
entity that has responsibility for the interim financial statements.

A3.

Sections 8100 1 and 8200 2 deal with a review of and reporting on annual or interim financial statements by a public
accountant, except when the auditor of an entity reviews its interim financial statements in the circumstances described
in this Section.

A4.

Section 7150 3 deals with additional considerations when the auditor consents to the use of the auditor's interim review
report on interim financial statements included, or incorporated by reference, in a securities offering document.
Section 7200 4 provides guidance on the auditor's involvement with interim financial statements in a comfort letter to
underwriters or others.

A5.

An auditor may be engaged to perform procedures on interim financial statements that constitute less than the interim review
contemplated by this Section. In such circumstances, the auditor would need to consider the professional responsibilities
that arise from the auditor's association with the interim financial statements as set out in Section 5020. 5

Objective (Ref: Para. 4)

A6.

The objective of a review of interim financial statements differs significantly from the objective of an audit of financial
statements in accordance with generally accepted auditing standards. The objective of an audit is to enable the auditor to
express an opinion on whether the financial statements are presented fairly, in all material respects, in accordance with
the applicable financial reporting framework. An interim review does not provide a basis for the expression of such an
opinion.

A7.

An interim review performed by the auditor in accordance with this Section also differs in several essential respects from a
review of historical financial statements performed by a public accountant in accordance with Sections 8100 and 8200.
(a)

The purpose of the auditor's interim review is to assist the entity's audit committee in discharging its responsibilities
for the review of the interim statements. The auditor's interim review report is intended solely for the audit
committee. This is in contrast to the public accountant's review engagement report under
Sections 8100 and 8200, which (unless the public accountant chooses otherwise) is normally unrestricted.

(b)

Through performing the audit of the entity's annual financial statements, the auditor possesses (or must obtain) an
understanding of the entity and its environment, including internal control, which the auditor updates through
inquiries made in the course of the interim review. As well, when the auditor is engaged to review the interim
financial statements, the frequency of the reviews enables the auditor to update the auditor's understanding of
the entity and its environment on a continuing basis. A public accountant who is not the auditor of the entity
does not normally have the same breadth and depth of understanding of the entity and its environment,
including internal control. That public accountant might often carry out more or different inquiries, and other
procedures, in performing a review in accordance with Sections 8100 and8200 than might be required in an
interim review under this Section.

(c)

Regulatory deadlines for filing interim financial statements often require the auditor to obtain a basis to conclude on
the interim financial statements within a much tighter timeframe than is often the case for reviews of historical
financial statements under Sections 8100 and 8200.

Agreeing the Terms of Engagement (Ref: Para. 5)

A8.

The auditor may become aware of potential scope limitations to the interim review when conducting the audit engagement.
Limitations might be imposed either by the audit committee or by circumstances such as deficiencies in internal control
so significant that it would be impracticable to effectively perform procedures. In these circumstances, the auditor might
consider accepting another type of engagement such as performing specified procedures and reporting on the
results. 6 However, it would not be appropriate for the auditor to accept another type of engagement if the auditor
believes the result would be association with financial statements that would be considered false or misleading.

A9.

The form and content of the engagement letter may vary for each engagement. For example, in complying with paragraph 5,
the engagement letter may make reference to the following matters:
Objectives and scope of the engagement

The purpose of the interim review is to assist the audit committee in discharging its responsibilities with respect to
the interim financial statements.

The interim review will be performed in accordance with Canadian generally accepted standards for a review of
interim financial statements by the entity's auditor. The interim review does not normally contemplate
verification of information obtained.

The scope of an interim review is substantially less than the scope of an audit performed in accordance with
generally accepted auditing standards, the objective of which is to express an opinion regarding the financial
statements and, accordingly, no such opinion is expressed.

An interim review does not provide assurance that the auditor would become aware of any or all significant matters
that might be identified in an audit.

An interim review is not designed to provide assurance on internal control or on matters not directly related to the
interim financial statements; however, the auditor is responsible for reporting to the audit committee significant
deficiencies in internal control of which the auditor becomes aware in the course of the review.

Responsibilities of management and the audit committee

Management is responsible for:

o

Preparing the interim financial statements in accordance with the applicable financial reporting framework,
including ensuring that the interim financial statements include appropriate disclosure and accounting
treatment of events occurring subsequent to the most recent date of the statement of financial
position;

Such internal control as management determines is necessary to enable the preparation of the interim
financial statements that are free from material misstatement, whether due to fraud or error;

Providing access to all information of which management is aware that is relevant to the preparation of the
interim financial statements such as records, documentation and other matters, including the interim
Management Discussion and Analysis;

Disclosing to the auditor any knowledge of actual, suspected or alleged fraud or illegal or possibly illegal
acts affecting the entity; and

At the conclusion of the engagement, undertaking to provide the auditor with a letter confirming certain
representations made during the interim review including, if applicable, affirming to the auditor in the
representation letter that the effects of any uncorrected misstatements identified by the auditor during
the engagement are immaterial, both individually and in aggregate, to the interim financial statements
for the period(s) under review.

The audit committee is responsible for conducting its own review of the interim financial statements. For this
purpose, it should not rely solely on the auditor's interim review report.

The expected auditor's interim review report

Whether the auditor's interim review report will be delivered orally or in writing.

If the auditor's interim review report is to be made in writing, the anticipated form and content of the auditor's interim
review report to be issued.

Other matters

The timing of the interim review.

The fact that the auditor will not agree to provide a written consent to the inclusion of the interim review report in a
public document, unless the written consent is required, pursuant to securities legislation, to the use of the
interim review report on financial statements included in a prospectus (see paragraph 21).

If unforeseen circumstances prevent the auditor from completing the interim review, the auditor will promptly inform
the audit committee of this fact and discuss the consequences of it.

An example of an engagement letter for an interim review engagement is set out in Appendix 1.
Communication with the Audit Committee (Ref: Para. 6)
A10.

The auditor may wish to refer to CAS 260 7 for guidance on matters to communicate to the audit committee. When
communicating with the audit committee, the auditor may wish to clarify that the objective of, and the procedures
undertaken in, an interim review engagement differ significantly from an audit engagement. Consequently, it is unlikely
that the auditor will become aware of all matters to communicate to the audit committee that the auditor would have
identified in an audit engagement.

Performing the Engagement

Materiality (Ref: Para. 7)
A11.

The auditor's consideration of materiality is a matter of professional judgment. The auditor may find it useful to obtain an
understanding of the views and expectations of the audit committee in assisting the auditor in considering materiality.

A12.

In addition to considering materiality for the interim financial statements, the auditor may choose to designate an amount
below which misstatements would be clearly trivial and would not need to be accumulated because the auditor expects
that the accumulation of such amounts clearly would not result in the need for material modification to the interim
financial statements for those statements to be in accordance with the applicable financial reporting framework.

Understanding the Entity and Its Environment, Including Its Internal Control (Ref: Para. 8)
Auditor Who Has Audited the Entity's Most Recent Annual Financial Statements
A13.

An auditor who has audited the entity's annual financial statements for one or more years would have a sufficient
understanding of internal control as it relates to the preparation of those statements. However, the auditor may not have
a sufficient understanding with respect to the preparation of interim financial statements. Internal control over the
preparation of interim financial statements may be different from internal control over the preparation of annual financial
statements because certain accounting principles and practices used for interim financial statements differ from those
used for annual financial statements. For example, the entity's cut-off procedures at the end of an interim period may be
substantially different from the procedures followed at year end. An auditor who has audited the entity's most recent
annual financial statements may comply with paragraph8 by updating his or her understanding of the entity and its
environment, including internal controls, as it relates to the preparation of both annual and interim financial statements,
through inquiry of officials responsible for financial and accounting matters.

Auditor Who Has Not Audited the Entity's Most Recent Annual Financial Statements
A14.

The auditor performing the interim review engagement may not have audited the entity's most recent annual financial
statements, or otherwise previously obtained a sufficient understanding of the entity and its environment, including
internal controls, as it relates to the preparation of both annual and interim financial statements. In this case,
paragraph 8 requires the auditor to perform procedures to obtain such an understanding. The auditor may find the
guidance in CAS 315 8 useful in considering the procedures to perform in obtaining an understanding of the entity and its
environment.

Inability to Complete the Interim Review

A15.

When obtaining an understanding of the entity and its environment, including internal controls, the auditor may become
aware of deficiencies in the entity's internal controls that are so significant that it would be impracticable for the auditor to
effectively perform review procedures that would provide the auditor with a basis for an interim review report. In this case,
the auditor may be precluded from completing the interim review. Paragraph 19 addresses the auditor's responsibilities
when the interim review cannot be completed.

Designing and Performing Procedures (Ref: Para. 9)

A16.

The characteristics of interim financial information necessarily affect the nature, timing and extent of procedures that the
auditor applies in performing an interim review. Timely issuance of interim financial statements may preclude
management from developing information and documentation underlying interim financial statements to the same extent
as that underlying audited annual financial statements. In addition, the use of estimates (for example, of revenues, costs
and expenses), is more common for interim than for annual reporting purposes. Another characteristic of interim financial
information is its relationship to annual financial information. For example, estimates of income taxes, pension costs and
other employee benefit costs may be influenced by judgments made at interim dates concerning the expected results of
operations for the remainder of the fiscal year.

A17.

Generally, interim review procedures are limited to inquiries and analytical procedures, rather than verification of
information obtained, concerning significant accounting matters relating to the interim financial statements. The auditor
performs these procedures to obtain a basis for reporting whether the auditor is aware of any material modification that

needs to be made for the interim financial statements to be in accordance with the applicable financial reporting
framework. Specific inquiries made and analytical and other procedures performed would be tailored to the engagement
based on the auditor's understanding of the entity and its environment, including internal control. For example, if the
auditor becomes aware of a significant change in the entity's control activities at a particular location, the auditor may
consider making additional inquiries (such as whether management monitored the changes and considered whether they
were operating as intended), employing analytical procedures with a more precise expectation, or both. An interim review
does not normally contemplate the auditor performing certain procedures carried out during an audit, such as:

Tests of accounting records through inspection, observation or confirmation.

Tests of controls to evaluate their effectiveness.

Verification of management's responses to the auditor's inquiries.

However, performing interim review procedures includes consideration of the reasonableness and consistency of
management's responses in light of the results of other inquiries and review procedures and the auditor's understanding
of the entity and its environment.
A18.

The procedures for a review of interim financial statements may be amended, as appropriate, to take into consideration the
results of auditing procedures applied either in performing the audit for an earlier year or period, or as part of the audit for
the current year. Certain audit procedures for the current year may be performed concurrently with the review of interim
financial statements. For example, there may be significant or unusual transactions, such as business combinations or
significant revenue transactions, on which audit procedures may be performed at the time of the interim review.

A19.

Examples of procedures the auditor may consider performing in an interim review are set out in Appendix 2.

A20.

An interim review may bring to the attention of the auditor significant matters affecting the interim financial statements but it
does not provide assurance that the auditor will become aware of any or all significant matters that might have been
identified had the auditor performed an audit. Notwithstanding that an interim review is carried out in accordance with this
Section, there is a greater risk that misstatements will not be detected in an interim review than in an audit.

Analytical Procedures
A21.

In planning and performing analytical procedures:

Expectations developed by the auditor in connection with an interim review may be less precise than those
developed in an audit.

The auditor may consider:

o

The effectiveness of the entity's internal control.

Matters that, in the preceding year or quarters, have required accounting adjustments.

For example, the auditor's previous evaluation of internal control may have resulted in a need for the auditor to apply
extensive substantive testing in performing the annual audit. Consequently, the auditor may perform more
extensive and detailed analytical procedures in the course of the interim review.
Inquiries Relating to Litigation, Claims and Other Contingencies (Ref: Para. 10)
A22.

Because an interim review does not normally involve verification of information obtained, it is normally unnecessary to send
an audit inquiry letter to the entity's legal counsel concerning litigation, claims or other contingencies. However, if
information comes to the attention of the entity's auditor that leads the auditor to question whether the interim financial
statements depart from the applicable financial reporting framework insofar as litigation, claims or other contingencies
may be concerned, and the auditor believes the entity's legal counsel may have information concerning the matter, an
inquiry of the legal counsel concerning the specific matter may be appropriate.

Procedures to Address Specific Circumstances

Interim Management Discussion and Analysis (Ref: Para. 12)
A22A.

A venture issuer in Canada may issue "quarterly highlights" to meet the interim Management Discussion and Analysis
requirements under securities legislation. References to interim Management Discussion and Analysis in this Section
include such quarterly highlights.

A23.

Some securities legislation provides a right of action against the directors, officers and insiders of an entity and, in some
circumstances, auditors and other experts, if a document with which they are associated contains a misrepresentation
(as defined in legislative provisions). In the absence of such legislative provisions, comparable rights (and a definition of
the term "misrepresentation") may be provided as a matter of contract. The term "misrepresentation" has different
definitions under different securities acts. Generally, it refers to an untrue statement of a material fact or an omission to
state a material fact that is required to be stated or that is necessary to make a statement not misleading in the light of
the circumstances in which it was made. In this context, a "material fact" means a fact that would reasonably be expected
to have a significant effect on the market price or value of the securities.

A24.

In reading the interim Management Discussion and Analysis as required by paragraph 12, the auditor is not required to
obtain additional knowledge relating to the information in the interim Management Discussion and Analysis beyond what
the auditor already possesses as a result of performing the audit of the entity's annual financial statements and the
review of the entity's interim financial statements.

A25.

If the auditor becomes aware of information that indicates that there may be a misrepresentation in the interim
Management Discussion and Analysis, paragraph 12 requires the auditor to discuss the matter with management and,
where appropriate, the audit committee or the board of directors. If the auditor's discussion with management and, where
appropriate, the audit committee or the board of directors, fails to dispel the auditor's concerns regarding a possible
misrepresentation in the interim Management Discussion and Analysis, the auditor may propose to management that it

discuss the matter further with the entity's legal counsel. Because legal counsel are experts in legal disclosure
requirements, the auditor will normally be able to rely on their opinion regarding how the relevant matters can be
resolved appropriately. The auditor may wish to receive written confirmation from the entity's legal counsel of its view on
the matter.
A26.

The auditor may also find the guidance in CAS 720, 9 adapted as necessary in the circumstances, useful in considering
actions to be taken when the auditor becomes aware of a material misstatement in the interim financial statements or a
misrepresentation in the interim Management Discussion and Analysis.

Written Representations (Ref: Para. 13)

A27.

Paragraph 13 requires the auditor to obtain representations from management. The auditor may also wish to obtain
representations from the audit committee on matters that the auditor considers appropriate. An example of a
representation letter is set out in Appendix 3.

A28.

Failure of management to provide the auditor with the written representations the auditor believes are necessary may
preclude the auditor from completing the interim review. Paragraph 19 addresses the auditor's responsibilities when the
interim review cannot be completed.

Additional Procedures (Ref: Para. 15)

A29.

An example of a matter that represents a possible misstatement is the recording of a sales transaction that may not meet
the revenue recognition criteria under the applicable financial reporting framework. In such a case, additional procedures
that the auditor may perform to resolve the matter include reading the sales contract and making inquiries of senior
marketing and accounting personnel regarding the terms of the transaction.

Accumulation and Evaluation of Misstatements (Ref: Para. 16)

A30.

Considerations that may affect the evaluation of whether misstatements, individually or in aggregate, are material include
the following:

The nature, the cause (if known) and the amount of such misstatements.

Whether the misstatements originated in a previous year or in interim periods of the current year.

Materiality judgments made in conjunction with the current or previous years' annual audits.

The potential effects of the misstatements on future interim and/or annual periods.

The appropriateness of offsetting a misstatement of an estimated amount with a misstatement of an item susceptible
to precise measurement.

Recognition that an accumulation of immaterial misstatements in the balance sheet could contribute to material
misstatements in future periods.

Resolution of Matters (Ref: Para. 17-19)

A31.

Paragraph 17 requires the auditor to inform the audit committee of certain matters to which management has not
responded appropriately within a reasonable period of time. The auditor may also consider informing the audit committee
even when management has responded appropriately (for example, by correcting misstatements).

A32.

Paragraphs 18(b), 28(b) and 30(c) require the auditor to consider whether to resign from the engagement. The auditor may
also consider resigning from the appointment to audit the annual financial statements.

The Auditor's Interim Review Report

Form and Content of the Auditor's Interim Review Report (Ref: Para. 20)
A33.

When an auditor performs a review of interim financial statements, the auditor becomes associated with the statements. In
most circumstances, it may be appropriate for the auditor to provide an oral auditor's interim review report to the audit
committee. However, the auditor is required to issue a written auditor's interim review report and request that the written
auditor's interim review report accompany the interim financial statements in the following circumstances:
(a)

When the auditor's interim review report contains a modified conclusion relating to a material departure from the
applicable financial reporting framework, paragraph 24 requires the auditor to issue a written interim report
expressing the modified conclusion to avoid being associated with false or misleading information.

(b)

When the auditor's interim review is referred to in a public document, paragraph 27 requires the auditor to issue a
written auditor's interim report to highlight the fact that the auditor's interim review report is solely for the use of
the audit committee to assist it in discharging its responsibilities with respect to the interim financial statements,
and not for any other purpose.

A34.

If the auditor's interim review report is delivered orally, the auditor may communicate the matters set out in paragraph 20 in
a manner that is less structured and formal than would be used in a written report. For example, the matters in
paragraphs 20(a) and 20(j) can be presumed, and need not be explicitly stated, when the auditor meets with the audit
committee to discuss the interim financial statements.

A35.

Members of audit committees are likely to be knowledgeable about financial reporting and are in a position to determine the
nature and extent of the assistance they need from the auditor. In addition, they can question the auditor about the
interim review procedures carried out, and the results of those procedures, to gain a better understanding of the work the
auditor has performed. As a result, they will become aware of the limitations of an interim review and the lower level of
assurance provided by such a review as compared to that provided by an audit. As well, they are able to make additional
inquiries and carry out other procedures in discharging their responsibilities with respect to the interim financial
statements. On the other hand, investors and investment analysts may not always be familiar with the limited level of
assurance provided by an interim review. Also, they are not in a position to influence the work an auditor carries out in

performing an interim review, or to discuss the review procedures and the results with the auditor. Therefore,
paragraph 20(h) requires the auditor to restrict the interim review report to use by the audit committee in conducting its
review of the interim financial statements. The auditor may also consider it appropriate to restrict distribution of the
auditor's interim review report. Appendix 4 provides illustrations of the auditor's interim review reports.
Written Consent to the Inclusion of the Auditor's Interim Review Report in a Public Document (Ref: Para. 21)
A36.

Securities legislation sometimes requires the auditor to provide a written consent to securities regulators for inclusion in an
offering document of the auditor's report on audited financial statements. Such a consent establishes a statutory defence
(a "due diligence defence") for directors, officers and, in some cases, underwriters that, in the event that the financial
statements contain a misrepresentation, they relied on the report of an expert. An entity that includes an auditor's interim
review report in a public document may ask its auditor to provide a written consent to the inclusion of the auditor's interim
review report in such a document. However, an interim review does not result in the auditor expressing an opinion on the
interim financial statements. Consequently, it may be inappropriate for directors, officers and others to rely on the
auditor's interim review report as the report of an expert in the discharge of their responsibilities. Therefore,
paragraph 21 prohibits the auditor from providing a written consent to the inclusion of the interim review report in a public
document unless the written consent is required, pursuant to securities legislation, to the use of the interim review report
on financial statements included in a prospectus.

Comparative Figures and Other Additional Information (Ref: Para. 25-26)

A37.

Comparative information included in the current period interim financial statements may be derived from interim financial
statements of a prior interim period or the most recent annual financial statements. When:
(a)

The auditor's interim review report on a prior interim period, as previously issued, included a modified conclusion;
or

(b)

The auditor's report on the most recent annual financial statements, as previously issued, included a modified
opinion,

it may be appropriate to make reference to the modified conclusion or modified opinion in the auditor's interim review report for
the current period. However, such a reference would not normally be appropriate when the matter giving rise to the
modified conclusion or modified opinion has been settled subsequently and does not appear to impair the comparability
of the current and comparative figures. If the matter resulting in the modified conclusion or opinion still exists and affects
the interim financial statements for the current period, it would be dealt with as outlined in paragraphs 22-24.
Additional Communication Responsibilities (Ref: Para. 27-30)
A38.

Actions to resolve the matter contemplated in paragraph 29 may include, for example, requesting the entity to reissue the
interim financial statements and, if applicable, the public document containing the interim financial statements, together
with the auditor's interim review report.

A39.

The auditor may wish to seek legal advice concerning the legal implications of taking the actions set out in
paragraphs 18 and28-30.

Subsequent Discovery of a Possible Material Misstatement (Ref: Para. 31-32)

A40.

A41.

Appropriate actions to resolve a subsequent discovery of a possible material misstatement may include:

Performing additional procedures to determine whether the possible material misstatement is in fact a material
misstatement.

Discussing the matter with management.

Informing the audit committee.

If applicable, including an additional paragraph in the auditor's interim review report to differentiate the new interim
review report from the original report as required in paragraph 32.

Seeking legal advice as to the action to be taken to discharge the auditor's responsibilities.

Where law, regulation or the financial reporting framework does not:

(a)

Prohibit management from restricting the amendment of the interim financial statements to the effects of the
subsequent event or events causing that amendment; and

(b)

Those responsible for approving the financial statements are not prohibited from restricting their approval to that
amendment,

the auditor may restrict the procedures on subsequent events required in paragraph 31 to that amendment.
A42.

The revised auditor's interim review report may be differentiated from the previous report by stating, in a separate
paragraph following the statement as set out in paragraph 20(g), that "the previous report dated [specify date] has been
withdrawn and the interim financial statements have been revised." This paragraph may also include either an
explanation of the revision or a cross-reference to a note to the revised interim financial statements explaining the
revision.

Documentation (Ref: Para. 33-34)

A43.

The form, content and extent of the documentation may be designed to meet the circumstances of the particular
engagement. Documentation is the principal record of the interim review procedures performed, the information obtained
and the conclusions reached by the auditor. Because of different circumstances in individual engagements, it is not
possible to specify the form and content of the documentation.

A44.

Findings or issues that the auditor may consider to be significant for documentation include, for example, the results of
interim review procedures that indicate that the interim financial statements could be materially misstated, actions taken
to address such findings and the basis for the final conclusions reached.

A45.

If communication with the audit committee is made orally, the communication may be documented in appropriate
memoranda or notations in the working papers.
Appendix 1
(Ref: Para. A9)

Example of an Interim Review Engagement Letter

The following is an example of an engagement letter for an interim review of interim financial statements. This letter is not
authoritative but is intended only to be a guide that may be used in conjunction with the considerations outlined in this
Section. It will need to be varied according to individual requirements and circumstances. It is drafted to refer to the
issuance of a written interim review report and would require adaptation if an oral interim review report is intended or
expected (see paragraph 20). It may be appropriate to seek legal advice that any proposed letter is suitable.
***
To the Management and the Audit Committee of ABC Company:
[The objective and scope of the interim review]
You have requested that we review the interim financial statements of ABC Company, which comprise the interim statement of
financial position as at June 30, 20X2 and the interim statement of comprehensive income for the three-month and sixmonth periods ended June 30, 20X2 and 20X1, and the statements of changes in equity and cash flows for the six-month
period then ended. Our review will not extend to the comparative statement of financial position as at December 31,
20X1 and the comparative statement of comprehensive income for the three-month and six-month periods ended June
30, 20X1, and the statements of changes in equity and cash flows for the six-month period then ended.
[The responsibilities of the auditor]
We will conduct our interim review for the purpose of assisting the audit committee in discharging its responsibilities with respect
to the interim financial statements. Our review will be conducted with the objective of providing us with a basis for
reporting whether we are aware of any material modification that needs to be made for such statements to be in
accordance with the [applicable financial reporting framework]. Such an interim review does not normally contemplate
verification by us of information obtained.
The scope of an interim review is substantially less than the scope of an audit performed in accordance with generally accepted
auditing standards, whose objective is the expression of an opinion regarding the financial statements and, accordingly,
we shall express no such opinion.
An interim review does not provide assurance that we will become aware of any or all significant matters that might be identified
in an audit. Such a review is not designed to provide assurance on internal control, or to identify and report to the audit
committee regarding any matters that come to our attention, other than matters directly related to the interim financial
statements. However, we will report to the audit committee any significant deficiencies in internal control of which we may
become aware in the course of our review.
Should unforeseen circumstances prevent us from completing the interim review, we will promptly inform the audit committee of
this fact and discuss the consequences of it.
[The responsibilities of management and the audit committee]
You have agreed that management of the company is responsible for:
(a)

Preparing the interim financial statements in accordance with the [applicable financial reporting framework],
including ensuring that the interim financial statements include appropriate disclosure and accounting
treatment of events occurring subsequent to the most recent date of the statement of financial position;

(b)

Such internal control as management determines is necessary to enable the preparation of the interim financial
statements that are free from material misstatement, whether due to fraud or error;

(c)

Disclosing to us any knowledge of actual, suspected or alleged fraud, or illegal or possibly illegal acts affecting the
entity;

(d)

Providing access to all information of which management is aware that is relevant to the preparation of the interim
financial statements such as records, documentation and other matters, including the interim Management
Discussion and Analysis; and

(e)

Undertaking to provide us, at the conclusion of the engagement, with a letter confirming certain representations
made during our interim review and, if applicable, affirming to us in the representation letter that the effects of
any uncorrected misstatements that we identify during the engagement that pertain to the current periods
under review are immaterial, both individually and in aggregate, to the interim financial statements.

Further, you have agreed that the audit committee is responsible for conducting its own review of the interim financial
statements. For this purpose, you should not rely solely on our interim review report.
[Other relevant information]
Management has informed us that the interim financial statements are expected to be completed by [date], and we understand
that the audit committee plans to meet on [date] to carry out its review. We shall plan to perform our review work during
the week of [date], and we shall be available to attend the audit committee meeting and discuss the results of our review.
[Insert other information, such as fee arrangements, billings and other specific terms, as appropriate.]

[Reporting]
In connection with the interim financial statements, you have agreed that:
(a)

We shall communicate the results of our review in writing to the audit committee; and

(b)

Our written interim review report will be included in all documents containing the interim financial statements if:
(i)

Our review is referred to in any public document containing the interim financial statements; or

(ii)

Our interim review report contains a modified conclusion relating to a departure from the [applicable
financial reporting framework], unless the departure from the [applicable financial reporting framework]
is a result of an exemption permitted by securities regulations.

[Insert other matters relating to the expected form and content of the auditor's interim review report, as appropriate.]
The form and content of our interim review report may need to be amended in light of our interim review findings.
Such a written interim review report will state that it is solely for the use of the audit committee to assist it in discharging its
obligation to review the interim financial statements, and that it should not be used for any other purpose. We shall not, in
any event, issue a written consent to the inclusion of our interim review report in a public document, unless the written
consent is required, pursuant to securities legislation, to the use of our interim review report if the financial statements
are included in a prospectus.
Please sign and return the attached copy of this letter to indicate your acknowledgment of, and agreement with, the
arrangements for our review of the interim financial statements, including our respective responsibilities.
XYZ & Co.
Acknowledged and agreed by Management and the Audit Committee of ABC Company:
(signed)
......................
Name and Title
Date
Appendix 2
(Ref: Para. A19)
Examples of Interim Review Procedures
The following procedures are only examples and, accordingly, they may not be the most appropriate or necessary in each
circumstance. Also, the order of the procedures provided is not intended to reflect their relative importance.
Analytical Procedures the Auditor May Consider Performing in an Interim Review

Comparing current interim financial statements with expected results, such as budgets or forecasts, taking into
account the susceptibility of budgets, forecasts or other anticipated results to manipulation by management to
reflect desired interim results and the inherent lack of precision in estimating the future. For example,
comparing tax balances, and the relationship between the provision for income taxes and pretax income in the
current interim financial statements with corresponding information in budgets (using expected rates) and
financial information for prior periods.

Comparing current interim financial information with relevant non-financial information.

Comparing ratios and indicators for the current interim period with expectations based on prior periods. For example,
performing gross profit analysis by product line and operating segment using elements of the current interim
financial information and comparing the results with corresponding information for prior periods. Examples of
key ratios and indicators are the current ratio, receivable turnover or days' sales outstanding, inventory
turnover, depreciation to average fixed assets, debt to equity, gross profit percentage, net income percentage
and plant operating rates.

Comparing ratios and indicators with those of entities in the same industry.

Comparing relationships among elements in the current interim financial statements with corresponding relationships
in prior periods (for example, expense by type as a percentage of sales, assets by type as a percentage of total
assets, and percentage of change in sales with percentage of change in receivables).

Comparing disaggregated data:

o

By period, such as financial statement items disaggregated into quarterly, monthly, or weekly amounts.

By product line or operating segment.

By location (for example, subsidiary, division or branch).

Analytical procedures may include such statistical techniques as trend analysis or regression analysis and may be performed
manually or with the use of computer-assisted techniques.
Inquiries and Other Review Procedures that an Auditor May Perform

Inquiring about:
o

The effectiveness of internal control, including the control environment and control systems, for the
preparation of both annual and interim financial statements.

Significant deficiencies in the design or operation of internal control that could adversely affect the issuer's
ability to record, process, summarize and report financial information.

Whether any significant changes in internal control, as it relates to the preparation of both annual and
interim financial statements, have occurred since the most recent financial statement audit or review
of interim financial statements (including changes in the entity's policies, procedures and personnel),
as well as the nature and extent of such changes.

Based on observation and inquiry, considering whether significant changes in internal control may have introduced
significant deficiencies in the design of internal control.

Reading the minutes of meetings of shareholders, the board of directors and committees of the board of directors to
identify matters that may affect the interim financial statements.

Obtaining evidence that the interim financial statements are in agreement with, or have been reconciled to, the
accounting records. For example, the auditor may compare the interim financial statements to the accounting
records, such as the general ledger, a consolidating schedule derived from the accounting records or other
supporting data in the entity's records. In addition, the auditor would consider inquiring of management as to
the reliability of the records to which the interim financial statements were compared or reconciled.

Reading documentation of the preceding year's audit, and of reviews of prior interim period(s) of the current year and
corresponding quarterly and year-to-date interim period(s) of the preceding year, to the extent necessary to
enable the auditor to identify matters that may affect the current interim financial statements, taking into
consideration:
o

Any corrected material misstatements;

Matters identified in any summary of uncorrected misstatements;

The risks of material misstatement due to fraud, including the risk of management override of controls; and

Significant financial accounting and reporting matters that may be of continuing significance, such as
deficiencies in internal control.

Considering the results of any audit procedures performed with respect to the current year's financial statements.

Obtaining reports from other auditors, if any, who have been engaged to perform a review of the interim financial
statements of significant components of the reporting entity or of its subsidiaries, joint ventures or other
investees or, if such reports have not been issued, making inquiries of the other auditors.

Inquiring of officials having responsibility for financial and accounting matters about:
o

Changes in the entity's accounting practices.

Significant changes in the entity's business activities.

Unusual or significant events and transactions occurring, and estimates made, during the interim period,
and how such events, transactions and estimates have been reported in the interim financial
statements.

Significant transactions occurring or recorded in the first several days and the last several days of the
interim period, and in the first several days of the next interim period.

The status of uncorrected misstatements identified during the previous audit and interim review (that is,
whether adjustments had been recorded subsequent to the previous audit or interim review and, if so,
the amounts recorded and the period in which such adjustments were recorded).

Management's knowledge of any actual, suspected or alleged fraud or illegal or possibly illegal acts
affecting the entity that involve management, employees who have significant roles in internal control,
or others where the fraud or illegal acts could have a material effect on the financial statements.

Significant journal entries and other adjustments.

Events subsequent to the date of the interim financial statements up to the date of the auditor's
communication that would have a material effect on such statements.

Whether:

The interim financial statements are prepared in accordance with the applicable financial
reporting framework.

The statements contain any known non-trivial errors.

The entity is in compliance with securities and other regulatory requirements, including new
or changed pronouncements or other regulations.

The entity has received any communications from regulatory authorities.

Events and Transactions about Which the Auditor May Inquire of Management

Business combinations.

Disposal of a segment of a business.

Impairment of assets.

Restructurings.

Application of new accounting principles.

Application of new or complex revenue recognition methods.

Other changes in accounting principles or the methods of applying them.

Use of derivative instruments and hedging activities.

Computation of earnings per share in a complex capital structure.

Adoption of new stock compensation plans or changes to existing plans.

Changes in litigation, or contingencies including guarantees or indemnities.

Changes in major contracts with customers or suppliers.

Trends and developments affecting accounting estimates, such as allowances for bad debts and excess or obsolete
inventories, provisions for warranties and employee benefits, and realization of unearned income and deferred
charges.

Compliance with debt covenants.

Changes in related parties or significant new related party transactions.

Material off-balance sheet transactions, special-purpose entities and other equity investments.

Issuance of debt or capital stock with unusual terms that could affect balance sheet or income statement
classification.

Other significant, unusual or infrequently occurring transactions.

Events subsequent to the date of the interim financial statements, up to the date of the auditor's communication, that
could have a material effect on such statements.
Appendix 3
(Ref: Para. A27)

Example of a Representation Letter

This example illustrates the form of representation letter for an interim review that might be used in conjunction with a
representation letter provided by management relating to the audit of the prior year's financial statements. Management
confirms the representations made in the previous representation letter as they apply to the interim financial statements,
and makes additional representations applicable to the interim financial statements.
[Entity Letterhead]
(To Auditor)

[Date]

This representation letter is provided in connection with your interim review of the [identify interim financial statements] of [name
of entity] as at [dates] and for the [periods], for the purpose of determining whether any material modification should be
made to the interim financial statements for them to be in accordance with the [applicable financial reporting framework].
We confirm that we are responsible for the preparation of the interim financial statements in accordance with the
[applicable financial reporting framework].
We confirm that (, to the best of our knowledge and belief, having made such inquiries as we considered necessary for the
purpose of appropriately informing ourselves):
Financial Statements

We have fulfilled our responsibilities, as set out in the terms of engagement dated [date], for the preparation of the
interim financial statements in accordance with the [applicable financial reporting framework].

The effects of any uncorrected financial statement misstatements identified and aggregated by you relative to the
interim period(s) in the current year, as summarized in the accompanying schedule, are immaterial, both
individually and in the aggregate, to the interim financial statements.

[Any other matters that the auditor may consider necessary.]

Internal Controls

We acknowledge our responsibility for such internal control as we determine is necessary to enable the preparation
of the interim financial statements that are free from material misstatement, whether due to fraud or error.

[Any other matters that the auditor may consider necessary (for example, that management has disclosed to the
auditor all known deficiencies in the design or operation of internal control over financial reporting identified as
part of management's evaluation, including separately disclosing to the auditor all such deficiencies that we
believe to be significant deficiencies in internal control over financial reporting).]

Information Provided

We have provided you with:

o

Access to all information of which we are aware that is relevant to the preparation of the interim financial
statements, such as records and documentation;

[Any other matters that the auditor may consider necessary. This could include, for example, that management has
provided the auditor with:
o

Additional information that the auditor has requested for the purpose of the interim review;

Unrestricted access to persons within the entity from whom the auditor determined necessary to obtain
evidence;

All financial records; and

All minutes of the meetings of shareholders, directors, and committees of directors, or summaries of
actions of recent meetings for which minutes have not yet been prepared. All significant board and
committee actions are included in the summaries.]

We have disclosed to you all information in relation to allegations of fraud, or suspected fraud, affecting the entity.

We have disclosed to you all known instances of non-compliance or suspected non-compliance with laws and
regulations whose effects should be considered when preparing the interim financial statements.

[Any other matters that the auditor may consider necessary.]

Other Matters

To the best of our knowledge and belief, no events have occurred subsequent to the date of the statement of
financial position and up to the date of this letter that would require adjustment to or disclosure in the
aforementioned interim financial statements.

[Any other matters that the auditor may consider necessary. This could include, for example, references to
representations made by management in a previous representation letter relating to the audit of the prior year's
financial statements that may also apply to the interim financial statements, such as:
o

Significant assumptions used by management in making accounting estimates, including those measured
at fair value, are reasonable.

Related party relationships and transactions have been appropriately accounted for and disclosed in
accordance with the requirements of the [applicable financial reporting framework].]

______________________________
Management (and, where appropriate, the Audit Committee)
Appendix 4
(Ref: Para. A35)
Illustrations of Auditor's Interim Review Reports

Illustration 1:

An auditor's interim review report when the auditor is engaged to report on a review of the current period interim financial
statements.

Illustration 2:

An auditor's interim review report when the auditor is engaged to report on a review of comparative interim financial
statements.

Illustration 1:
[Letterhead of entity's auditor]
[Date]
[Addressee normally the audit committee]
Dear Sirs / Mesdames:
In accordance with our engagement letter dated ........., we have performed an interim review of the statement of financial
position of .................. as at June 30, 20X2, the statements of comprehensive income for the three-month and six-month
periods ended June 30, 20X2, and the statements of changes in equity and cash flows for the six-month period then
ended. These financial statements are the responsibility of [the entity's] management.
We performed our interim review in accordance with Canadian generally accepted standards for a review of interim financial
statements by an entity's auditor.
An interim review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding
the financial statements. Accordingly, we do not express such an opinion. An interim review does not provide assurance
that we would become aware of any or all significant matters that might be identified in an audit.
Based on our interim review, we are not aware of any material modification that needs to be made for these interim financial
statements to be in accordance with the [applicable financial reporting framework].
This report is solely for the use of the Audit Committee of ............... to assist it in discharging its regulatory obligation to review
these financial statements, and should not be used for any other purpose.
[Auditor's signature]
Illustration 2:
[Letterhead of entity's auditor]
[Date]
[Addressee normally the audit committee]
Dear Sirs / Mesdames:

In accordance with our engagement letter dated ........., we have performed interim reviews of the statement of financial position
of ................... as at June 30, 20X2, the statements of comprehensive income for the three-month and six-month periods
ended June 30, 20X2 and 20X1, and the statements of changes in equity and cash flows for the six-month period then
ended. These financial statements are the responsibility of [the entity's] management.
We performed our interim reviews in accordance with Canadian generally accepted standards for a review of interim financial
statements by an entity's auditor.
An interim review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding
the financial statements. Accordingly, we do not express such an opinion. An interim review does not provide assurance
that we would become aware of any or all significant matters that might be identified in an audit.
Based on our interim reviews, we are not aware of any material modification that needs to be made for these interim financial
statements to be in accordance with the [applicable financial reporting framework].
We have previously audited, in accordance with Canadian generally accepted auditing standards, the statement of financial
position of ............... as at December 31, 20X1, and the related statements of comprehensive income, changes in equity
and cash flows for the year then ended (not presented herein). In our report dated February 15, 20X2, we expressed an
unmodified audit opinion on those financial statements. In our opinion, the information set forth in the accompanying
[condensed] statement of financial position as at December 31, 20X1, is fairly stated, in all material respects, in relation
to the financial statements from which it has been derived. 1a
This report is solely for the use of the Audit Committee of ............... to assist it in discharging its regulatory obligation to review
these financial statements, and should not be used for any other purpose.
[Auditor's signature]

Document ID: 7060