Lenders, investors, funders and boards often need more than a set of financial statements — they need an independent CPA’s report on them. We perform audit and review engagements under Canadian professional standards, and the right one depends on who will rely on your statements and what they require.
Two Levels of Assurance
Audit engagements
An audit provides reasonable assurance — the highest level available — that your financial statements are free of material misstatement. We test balances and transactions, examine supporting evidence, consider the internal controls relevant to the audit and confirm information with third parties where needed. You receive an independent auditor’s report containing our opinion.
Audits are usually required by legislation, a funding agreement, a lender’s covenant or an organization’s own bylaws, which is often the case for non-profit organizations and charities.
Review engagements
A review provides limited assurance. We perform inquiry and analytical procedures to determine whether anything suggests the statements are materially misstated, without the detailed testing of an audit. You receive a review engagement report stating our conclusion. Reviews are common for owner-managed businesses whose bank or other stakeholders want more comfort than a compilation provides.
Which one do you need?
| Review engagement | Audit engagement | |
|---|---|---|
| Level of assurance | Limited | Reasonable |
| Main procedures | Inquiry and analysis | Testing, evidence and third-party confirmations |
| Report issued | Review engagement report | Independent auditor’s report |
| Typical trigger | A bank or stakeholder request | Legislation, a funder, bylaws or a lender covenant |
The required engagement depends on your circumstances. Before recommending one, we confirm what your lender, funder or governing documents actually require.
Preparing for your engagement
- Year-end bank, credit card and loan reconciliations
- Accounts receivable and payable listings that agree to the general ledger
- Inventory counts and details of capital asset additions, if applicable
- Copies of loan agreements, leases and significant contracts
- Prior-year financial statements and your previous accountant’s contact details
Our article How to Prepare for a Review Engagement or Audit covers this in more detail.
Frequently Asked Questions
Can we move from a review to an audit later?
Yes. If a lender or funder raises its requirement, we plan the change with you in advance. The first audit year usually involves extra work on opening balances.
How long does an engagement take?
It depends on the size of your organization and how ready your records are. We agree on a timeline in the engagement letter before work begins.
Do you need to be independent of us?
Yes. Professional rules require independence for audit and review engagements, which can limit certain other services we provide to the same client. We will tell you if this applies to you.