Do you have confusion between Audit & Limited review?

Understand the procedures about how listed companies are required to prepare the financial results on quarterly and annual basis

What is Limited Review? To whom is it applicable? What is an Auditor's perspective on Limited Review of Listed Companies as per SEBI LODR Regulations?

What period is to be reported in the Financial results?

Are any Additional reporting requirements?

Who should do the Limited Review?

What is expected out of limited review?

Which auditing standards are applicable to LR?

What are the limited review procedures?

Understanding limited review report

What should be Documented for limited review

Click here to know about All these questions will be answered in this post

Links to SEBI LODR regulations & Format of Results

SEBI LODR Regulations (SECURITIES AND EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015)

https://www.sebi.gov.in/sebiweb/home/HomeAction.do?doListing=yes&sid=1&ssid=3&smid=0

Quarterly / Annual Financial Results & Limited Review Report of listed Non convertible Securities

Jul 29, 2022 - SEBI/HO/DDHS/DDHS_Div1/P/CIR/2022/0000000103 https://www.sebi.gov.in/legal/circulars/jul-2022/lodr-single-operational-circular-for-listing-obligations-and-disclosure-requirements-for-non-convertible-securities-securitized-debt-instruments-and-or-commercial-paper_61345.H T M L

Quarterly / Annual Financial Results & Limited Review Report of Equity listed entities

Jul 19, 2019 - CIR/CFD/CMD1/80/2019 https://www.sebi.gov.in/legal/circulars/jul-2019/procedure-and-formats-for-limited-review-audit-report-of-the-listed-entity-and-those-entities-whose-accounts-are-to-be-consolidated-with-the-listed-entity_43616.H T M L

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ABOUT THE AUTHOR

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Thank you

Great questions! Let me break down the key differences and details about Audit vs Limited Review, especially for listed companies and their financial results under SEBI LODR Regulations.

1. What is Limited Review?

Limited Review is a less intensive process than a full audit.
It provides moderate assurance that the financial results are free from material misstatements.
It is mainly based on inquiry, analytical procedures, and discussions with management.
It is mandatory for listed companies to get their quarterly and half-yearly financial results subjected to Limited Review before submission to stock exchanges.

2. Applicability of Limited Review

Applicable to listed companies under SEBI regulations for quarterly and half-yearly financial results.
Also applicable to entities whose accounts are consolidated into the listed company’s financial statements.

3. Auditor's Perspective on Limited Review

The auditor provides a Limited Review Report expressing limited assurance (not reasonable assurance like an audit).
The report states that nothing has come to the auditor’s attention indicating material modification needed.

4. Period Covered in Financial Results

Quarterly results cover each quarter (Q1, Q2, Q3, Q4).
Half-yearly results cover 6 months.
Annual results are audited and provide a reasonable assurance opinion.

5. Additional Reporting Requirements

Compliance with SEBI LODR Regulations and Stock Exchange guidelines.
Filing Limited Review reports along with financial results.
Disclosure of any significant events or financial impact on operations.

6. Who Performs Limited Review?

Practicing Chartered Accountants or Audit Firms registered with SEBI.
They should be independent of the company.

7. Expected Outcome of Limited Review

Auditor concludes whether they are aware of any material modifications required.
It is not a full audit, so it does not provide an opinion on overall financials.

8. Applicable Auditing Standards

SA 2400 (Engagements to Review Financial Statements) (now replaced by SA 900 series) or
SA 900 - Engagements to Review Historical Financial Statements under Indian Standards on Auditing (ISA 900 equivalent).

9. Limited Review Procedures

Inquiry and analytical procedures rather than detailed testing.
Discussions with management.
Review of supporting documents as necessary.
Comparison with previous periods and budgets.

10. Understanding Limited Review Report

The report clearly mentions it is a limited review.
Provides moderate assurance that financials are free of material misstatement.
Usually includes management’s responsibility and auditor’s responsibility clauses.

11. Documentation

Engagement letter.
Review plan and procedures.
Evidence obtained from inquiry and analytical procedures.
Review report issued.

Useful Links:

SEBI LODR Regulations
SEBI LODR 2015
SEBI Circular on Financial Results & Limited Review Report
SEBI Circular July 2022
SEBI Circular July 2019 (Equity Listed Entities)
SEBI Circular July 2019