What is referred to as a cold review in auditing?

A cold review in auditing refers to a review that is carried out after the audit report has been signed. This type of review typically focuses on assessing the quality and appropriateness of the audit work and the conclusions reached by the audit team, in order to ensure compliance with auditing standards and improve future audits.

Conducting a cold review allows for an independent evaluation of the audit process and findings, providing insights that may not have been apparent during the audit itself. Such reviews can be beneficial for both the auditing firm and the audited entity, as they help enhance the overall effectiveness of the audit process and ensure that any potential errors or oversights are identified and addressed post-reporting.

In contrast, a review conducted during the audit or immediately before the report is signed would not be classified as a cold review, as these occur while the audit work is still in progress. Additionally, a review of financial statements itself does not capture the essence of a cold review, which is specifically tied to the audit work and its outcomes rather than just the financial documentation.