The Independent Reviewer: Owning Your Responsibilities Under ISRE 2400

19 Aug

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Independent reviews are often described as the lighter cousin of the audit. They may sound like less work with fewer risks and a quicker turnaround. But ask any Chartered Business Accountant in Practice who has actually signed off on one, and they will tell you that it is not a box-ticking exercise. An independent review under ISRE 2400 is a professional assurance engagement that places serious responsibilities on your shoulders. If you get it wrong, the risks are high for your client, for the public, and for your own reputation.

So, what exactly does ISRE 2400 expect from you as the practitioner? Let us unpack it in a practical and real-world way that makes sense for your day-to-day practice.

1. The Responsibility Shift: From Management to You

It starts with remembering that management owns the financial statements. Your responsibility is not to compile them, but to review them and provide limited assurance. This means your role is to form a conclusion on whether anything has come to your attention that causes you to believe the financial statements are materially misstated.

Think of it like being the referee in a rugby match. The players, which is management, own the game. You, as the practitioner, make sure the rules are followed and nothing is out of place. You do not score the points, but you keep the game fair.

2. Setting the Stage: Engagement Acceptance

Before you even start, ISRE 2400 requires you to determine whether the engagement is appropriate. You need to confirm the following:

That the entity falls within the scope for an independent review under South African law.
That management acknowledges its responsibilities for preparing the financial statements, maintaining internal controls, and providing you with the necessary information.

This step may feel administrative, but it is your safety net. If management is vague, uncooperative, or insists you take responsibility for their records, you should walk away. Accepting the wrong engagement is like boarding a sinking ship.

3. Professional Scepticism: Your Superpower

Independent reviews are not audits, but that does not mean you accept everything at face value. Your responsibility is to maintain professional scepticism. This means adopting an alert and questioning mindset.

If management tells you that receivables are all collectible, you do not just smile and nod. You ask for supporting schedules, review subsequent receipts, and check whether old debtors have been written off. If you spot something odd, you dig deeper.

Professional scepticism is what separates a true practitioner from a rubber-stamper. It is not about mistrust, but about healthy curiosity.

4. Procedures That Matter: Enquiry and Analytical Review

Under ISRE 2400, your toolkit is enquiry and analytical procedures. These are not complicated, but they require structure:

Enquiry: You ask management and staff about key balances, unusual movements, and compliance issues. For example, “Why did inventory increase 40 percent when sales stayed flat?”
Analytical procedures: You compare numbers across periods, calculate ratios, and look for patterns that do not add up.

Your responsibility is to apply these procedures in a way that gives you enough evidence to conclude. The trick is in the follow-up. If something looks strange, you cannot ignore it. You probe until you are satisfied that the financials are not materially misstated.

5. Documentation: Your Invisible Shield

If you did not document it, you did not do it. ISRE 2400 is clear. You must prepare working papers that show the work performed, evidence obtained, and the basis for your conclusion.

Think of your file as your insurance policy. If anyone challenges your review later, whether a regulator, a client, or even a court, your documentation protects you. Keep it neat, keep it clear, and keep it complete.

6. Reporting: Saying It Right

At the end of the review, your responsibility is to issue a practitioner’s report. This report must clearly state:

That the engagement was conducted under ISRE 2400.
That it is not an audit.
That you provide limited assurance, not reasonable assurance.
Your conclusion, phrased exactly as ISRE requires.

This is not the place for creative writing. Stick to the prescribed format. A sloppy or incorrect report undermines all the work you have done.

7. Ethics and Independence: The Non-Negotiables

CIBA members know this well. Your responsibilities under ISRE 2400 are grounded in ethics. You must comply with the IESBA Code of Ethics and CIBA’s ethical requirements. That means:

Stay independent. Do not review your own work or financials where you have conflicts of interest.
Act with integrity. Say no to shortcuts or pressure from clients.
Maintain confidentiality, but also be ready to disclose if required by law.

These are not abstract rules. They are daily guardrails that protect both you and the public.

8. The Human Side: Managing Client Expectations

Here is the fun but challenging part. Many clients think an independent review is just a quick rubber stamp. Part of your responsibility is to educate them. Explain that while it is less detailed than an audit, it still involves procedures, questions, and professional judgement.

Use examples they will understand:

“I am not checking every single transaction, but I am making sure the big picture makes sense.”
“If something does not look right, I will ask for more information. That is my job.”

This builds trust, manages expectations, and positions you as a professional adviser rather than a box-ticker.

Wrapping Up

Your responsibilities under ISRE 2400 are not just technical obligations. They are part of your professional identity as a Chartered Business Accountant in Practice. You are providing assurance that gives confidence to shareholders, lenders, regulators, and the public.

Done properly, an independent review shows that you can balance professional scepticism with practical judgement, technical compliance with human interaction. It is what makes the role exciting and meaningful.

So the next time you accept an independent review, think of yourself not as a lighter auditor but as a skilled referee, investigator, and communicator rolled into one. ISRE 2400 gives you the framework. It is up to you to bring it to life.

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