What 'unaudited, subject to limited review' means on quarterly results

Most quarterly results carry the words “unaudited” and “subject to limited review”. They sound technical, but they are simple to explain, and they tell you how much checking stands behind the numbers.

Audit and limited review

An audit is the full examination by the company’s independent auditors. The auditors test the accounts in depth and give an opinion on whether the financial statements give a true and fair view. The annual results are audited.

A limited review is lighter. In the language of a typical auditor’s report on quarterly results, a review consists mainly of inquiries of the people responsible for finance and accounting, and of analytical and other review procedures. It is substantially less in scope than an audit, and the auditor says explicitly that no audit opinion is expressed. Instead, the auditor states a conclusion in a negative form: that nothing has come to their attention that causes them to believe the results contain a material misstatement.

So “unaudited, subject to limited review” means: the results have not been audited, but the auditor has reviewed them to that lighter standard.

Why quarterly results are reviewed, not audited

Auditing four times a year would be costly and slow, and the deadlines for quarterly results are short. A limited review gives some assurance quickly, and the full audit still happens once a year.

What the auditor’s report tells you

Each results statement is accompanied by the auditor’s report. It typically says:

• Which standards the results follow. Quarterly statements are prepared under the interim reporting standard, Ind AS 34.
• Which review standard the auditor used. The report normally names the Standard on Review Engagements (SRE) 2410, issued by the Institute of Chartered Accountants of India.
• Whether the auditor’s conclusion is unqualified, or whether there is a modified opinion or a matter they wish to draw attention to.
• Whether any figures were not reviewed. Occasionally, the figures for the corresponding quarter of the previous year were approved by the company’s board but not reviewed by the current auditor. The report says so, and it is worth knowing when you compare against last year.

The last quarter and the annual results

The rules treat the last quarter of the year differently. Listed companies must publish audited annual results within 60 days of the year end, and the last quarter’s figures are audited or limited-reviewed and are published along with the annual results.

Statements often add a note that the last quarter’s figures are the balancing figures: the difference between the audited full-year figures and the published nine-month figures. This is why Q4 numbers can look different from the pattern of the other quarters, and why they are sometimes restated when the year’s audit is complete.

What to do with this

1. Read the words on the statement: unaudited or audited, and whether a limited review report is attached.
2. Open the auditor’s report and look for any modification, emphasis of matter, or “not reviewed” comparatives.
3. Treat quarterly numbers as reviewed but provisional, and annual numbers as the audited reference.
4. If figures change later, check for a revised filing on the company’s website.

Related: standalone vs consolidated results and the complete guide.