Clause 49 of the Listing Agreement in India pertains to the corporate governance requirements for listed companies. It lays down the guidelines that companies listed on Indian stock exchanges must adhere to in order to ensure transparency, accountability and good corporate governance practices. Under Clause 49, a listed company is required to submit its quarterly financial results to the stock exchange within 45 days from the end of the quarter. Along with these results, the company is also required to submit a limited review report by a qualified auditor.

A limited review of financial statements is a review engagement conducted by a chartered accountant (CA) to provide limited assurance on the financial statements of a company. The purpose of a limited review is to enable the CA to express a limited assurance conclusion on whether the financial statements are free from material misstatement. This is done through inquiry, analytical procedures and discussion with management. Unlike a full-fledged audit, a limited review does not provide a high level of assurance, as the CA does not perform extensive testing of internal controls and other procedures. A limited review is typically carried out for quarterly or half-yearly financial statements, rather than annual statements, and it is often used by companies to comply with regulatory requirements or to provide stakeholders with a measure of comfort that the financial statements are reliable.

With the multitude of challenges being faced by all, corporate reporting becomes even more complex, particularly in areas where judgments are exercised and estimates made. The term “Limited Review” is one of the major keys to establish judgement and estimates on the assertions of financial statements. As per clause 41 of the Listing Agreement, every listed company and all entities whose accounts are to be consolidated with the listed company is required to get limited review done through statutory auditors and furnish the unaudited quarterly result to the concerned stock exchange within 45 days of the end of respective quarter.

The chartered accountant issues a report on the limited review, which contains their findings and conclusions. The report is addressed to the company’s board of directors or management, and it is not intended to be a public document.

The limited review report is required to be prepared in accordance with the standards on review engagements issued by the Institute of Chartered Accountants of India (ICAI). The report must also contain certain specified disclosures, such as a statement on the responsibility of the company’s management for the financial statements, a statement on the auditor’s independence, and a statement on the scope of the limited review.