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i dont really understand what these is all about. please can you edify me on this, so that i can clearly differentiate the two, and to be able to tell who is carrying out the review, and for whom;
hot review is when the review takes place BEFORE the auditor forms the audit opinion. Typically, there’s an increased degree of risk involved in the audit ( for any one of a number f reasons )
Cold review takes place AFTER the audit report has been finalised and, typically, the fin stats have been filed with the relevant government department.
Cold reviews are to ensure that the quality of the audit work meets acceptable standards established by the audit firm
Hot review= Before the firms report is issued, enhances quality of assurance work, very risky so review is taken by an independent partner.
Cold review= It acts as a Quality monitoring process and to identify deficiencies from audit, and it covers reviews of all audit working papers that has been gathered at the finalization of audit.
Greetings,
I have understood the concepts though i am unsure as to who performs what.
Hot review is performed by a partner of the firm prior to the signing of the report to minimise audit risks. What about the cold review?
ThanksEither of these review would be carried out by an “independent” partner (or sometimes by a “review department” from within the audit practice)
Personally I was only ever the witness of one cold review when working in the Caribbean and a partner from Canada came down to the island and reviewed 4 or 5 audit files
His visit was one of many visits around the Caribbean Islands and he was accompanied by his wife so a jolly time was had by the couple!
I was also working in the Baltics lecturing on a course for which none of the employees of one of the big 4 attended even though they were enrolled on the course. The reason for non-attendance was that they were required themselves to cold review audits on which they had been involved to ensure that all “i”s were dotted and that all “t”s were crossed in preparation for a cold review visit from a partner from Scandinavia
Does that explain it?
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