Interim financial information – including quarterly and half-year reporting – plays a crucial role in capital markets by providing timely insights to investors, regulators, lenders, and other stakeholders.

Yet despite its importance, the standard governing auditor involvement in interim reviews has remained largely unchanged for more than 20 years. During that period, the reporting environment has evolved considerably, shaped by enhanced assurance standards, growing expectations around transparency and governance, and heightened attention to issues such as fraud, going concern, and non-compliance with laws and regulations (NOCLAR).

The IAASB’s proposals seek to modernize the standard in response to these developments while promoting greater consistency in practice globally.

A central feature of the proposed revisions is a clearer articulation of what an interim review engagement is—a limited assurance engagement—and how it differs from a financial statement audit—a reasonable assurance engagement. While both engagements involve a process of gathering evidence concluding whether the financial statements or the interim financial information are presented, in all material respects, in accordance with an applicable financial reporting framework, there are important differences between them.    

The proposed revisions reinforce this distinction by emphasizing differences in the procedures performed to gather evidence in each engagement. Review procedures primarily consist of inquiries and analytical procedures, designed and performed to obtain an evidence basis that is sufficient and appropriate for concluding on the interim financial information.

Under the proposals, the auditor’s objective in an interim review engagement remains unchanged; the auditor is also required to report on whether anything has come to their attention that causes them to believe the interim financial information is materially misstated.

By clarifying the scope of interim reviews, the IAASB aims to reduce misunderstanding among both practitioners and users of financial statements and help narrow the long-standing “expectations gap” associated with assurance engagements.le on the IAASB website.

The exposure draft also introduces enhanced requirements in several areas of heightened public interest.

Going Concern

The proposals include strengthened requirements and enhanced communication related to going concern considerations. These recognize the importance to users of interim financial information of transparency related to an entity’s ability to continue operating while acknowledging that the entity has primary responsibility forming a view on such matters and communicating to its users.

Fraud and NOCLAR

Updated provisions related to fraud and NOCLAR are intended to provide greater clarity regarding the auditor’s responsibilities related to such matters in an interim review engagement.

These revisions acknowledge that even within a limited assurance engagement, an entity’s stakeholders expect auditors to respond appropriately to indicators of potential misconduct, non-compliance with the law, and fraud.

Another significant aspect of the proposals is the modernization of the auditor’s interim review report.

The IAASB is proposing changes designed to improve transparency and user understanding, including clearer descriptions of:

• The purpose and limitations of an interim review engagement
• The nature of limited assurance
• Ethical and independence responsibilities
• Going concern-related matters

The proposed reporting enhancements reflect a broader trend across assurance standards toward more informative and decision-useful communication.

The proposed revisions also aim to support greater consistency in the performance of interim review engagements across jurisdictions and firms.

Among the areas addressed are:

• Planning and performing review procedures
• Determining materiality in interim reporting contexts
• Engagement-level quality management
• Group interim review engagements

For multinational firms and global stakeholders, greater consistency could help improve comparability and reduce variability in practice.

The IAASB has also updated the structure and drafting of ISRE 2410 to better align with:

• Recent IAASB auditing and assurance standards
• The International Framework for Assurance Engagements (see volume 5 of the IAASB handbook)
• Modern drafting conventions designed to improve clarity and usability

This alignment is intended to make the standard easier to apply in practice and more consistent with contemporary assurance methodologies used by firms globally.

The IAASB is encouraging feedback from practitioners, regulators, investors, preparers, and other stakeholders on the proposed revisions, including whether:

• The requirements are proportionate and operational
• The proposals appropriately balance clarity with flexibility
• The revised reporting model improves user understanding
• The implementation implications are practical across jurisdictions

The IAASB has also coordinated closely with the International Ethics Standards Board for Accountants (IESBA) to align ethical considerations related to interim review engagements.

Comments on the exposure draft are requested by September 3, 2026.