Review Engagement Letter Template for New Zealand
Generate a bespoke document
What is a Review Engagement Letter?
The Review Engagement Letter is a crucial document used when a company requires limited assurance on their financial statements, rather than the higher level of assurance provided by an audit. This document, governed by New Zealand professional standards and regulations, establishes the professional relationship between the accounting firm and the client. The letter outlines key aspects including the scope of review procedures, limitations of the engagement, responsibilities of both parties, fee arrangements, and timeline for deliverables. It serves as the primary agreement document for review engagements and must comply with Professional and Ethical Standard 1 and New Zealand Standard on Review Engagements 2400 (Revised). The letter is particularly relevant for companies that require a level of external assurance but may not need or be required to have a full audit.
Trusted by high-performance teams
About the Review Engagement Letter
A Review Engagement Letter is a legally binding contract that establishes the terms and conditions for an accounting firm to provide limited assurance services on your company's financial statements. Under New Zealand law, this document must comply with specific professional standards and clearly define the scope, responsibilities, and limitations of the engagement to protect both parties and ensure regulatory compliance.
When do you need this document?
You need a Review Engagement Letter when your company requires external assurance on financial statements but doesn't need a full audit. This situation commonly arises for smaller companies, subsidiaries of larger entities, or businesses seeking to enhance credibility with lenders, investors, or other stakeholders. The document is essential when engaging an accounting firm to perform review procedures under New Zealand Standard on Review Engagements 2400 (Revised). You'll also need this letter if your company's constitution, loan agreements, or regulatory requirements specify review-level assurance rather than audit-level assurance. Additionally, parent companies often require subsidiaries to obtain review engagements as part of their group reporting processes.
Key legal considerations
The letter must clearly distinguish between review and audit engagements, as reviews provide limited assurance rather than reasonable assurance. You should ensure the document specifies management's responsibilities for preparing financial statements, maintaining internal controls, and providing complete access to records. The engagement letter must outline the reviewer's independence requirements under Professional and Ethical Standard 1, including any threats to independence and safeguards implemented. Fee arrangements, timelines, and deliverable formats should be clearly documented to avoid disputes. The letter should also address limitations of the review engagement, including that material misstatements might not be detected, and specify the form of review report to be issued.
Legal requirements in New Zealand
Under the Financial Reporting Act 2013, certain entities must prepare financial statements that comply with applicable financial reporting standards, and review engagements must follow New Zealand Standard on Review Engagements 2400 (Revised). The Companies Act 1993 governs when companies require external assurance and the qualifications of reviewers. Your engagement letter must ensure the appointed reviewer holds appropriate qualifications and meets independence requirements. The Contract and Commercial Law Act 2017 provides the legal framework for the contractual relationship, requiring clear terms regarding scope, responsibilities, and remedies. Professional and Ethical Standard 1 mandates that reviewers maintain integrity, objectivity, professional competence, confidentiality, and professional behaviour throughout the engagement. The letter should also comply with quality control standards and specify how the engagement will be conducted, reviewed, and documented to meet professional requirements.
GOVERNING LAW
Applicable law
This Review Engagement Letter is drafted to comply with New Zealand law. Key legislation includes:
New Zealand Standard on Review Engagements 2400 (Revised): Establishes standards and provides guidance on the practitioner's professional responsibilities when undertaking an engagement to review financial statements
Financial Reporting Act 2013: Provides the regulatory framework for financial reporting in New Zealand, including requirements for different types of entities
Companies Act 1993: Governs company operations in New Zealand, including requirements for financial reporting and audit/review engagements
Contract and Commercial Law Act 2017: Provides the legal framework for forming and executing professional service contracts in New Zealand
Privacy Act 2020: Governs the collection, use, and disclosure of personal information, relevant for handling client data during the review engagement
Fair Trading Act 1986: Ensures fair trading practices and prohibits misleading conduct in trade, including professional services
Anti-Money Laundering and Countering Financing of Terrorism Act 2009: Requires certain due diligence procedures when establishing business relationships with clients
Explore 208,390+ legal templates
Explore 208,390+ legal templates
Genie's Security Promise
Genie is the safest place to draft. Here's how we prioritise your privacy and security.
Your data is private:
We do not train on your data; Genie's AI improves independently
All data stored on Genie is private to your organisation
Your documents are protected:
Your documents are protected by ultra-secure 256-bit encryption
We are ISO27001 certified, so your data is secure
Organizational security:
You retain IP ownership of your documents and their information
You have full control over your data and who gets to see it