When it comes to financial reporting, businesses have varying needs based on their size, structure, and the expectations of stakeholders.
To address these needs, financial statements can be prepared at three distinct levels of assurance: Audit, Review, and Compiled Financial Information. These tiers represent standard levels of financial statement engagements recognized in accounting practices.
Each level offers a different degree of scrutiny and confidence in the financial data presented, catering to different purposes and budget considerations.
Below, we outline these three levels of service/engagement to help you determine which is most appropriate for your business.
Engagement Levels
Audit (Most Complex)
Audits are examinations made in accordance with Canadian Audit Standards. The goal of an audit is to be able to express an opinion that the statements present fairly the financial position and results of operations. Audited financial statements are usually required to be presented in accordance with Generally Accepted Accounting Principles (GAAP). Audits are the most expensive form of financial statement report as this report requires the most work.
Review
Review engagements apply analytical procedures to allow us to provide assurance that nothing has come to our attention that indicates that the financial statements are not in accordance with generally accepted accounting principles. Reviewed financial statements are usually required to be presented in accordance with Generally Accepted Accounting Principles (GAAP). Reviewed financial statements are less expensive than an audit, as less direct testing of transaction and balances are performed.
Compiled Financial Information (Most Basic)
Compiled Financial Information (aka compliation) engagements are generally applied to financial statements where a lower level of assurance is required by the users of the statements. This is the simplest form of report by accountants, and is usually all that is required if the only people reading the financial statements are the owners of the business.
Which Level Is Right for Your Business?
Our team will meet with you to discuss what is the right financial statement report for your business. We believe that identifying the report needed not just for today, but for the foreseeable future. We will work with business owners to identify what is required for the year end engagement, and what can be done to minimize the costs to owners.
We strive to:
Identify the optimal level of financial statement assurance required
Minimize your company’s tax exposure
Provide recommendations to minimize risks and address internal control weaknesses
Recognize opportunities for growth, efficiencies and operational improvements
Why Choose KMA for Your Accounting & Audit Needs?
We are committed to providing high-quality and cost-effective accounting and assurance services that exceed our clients’ expectations.
Our financial statement assurance services are timely, efficient and informative.
We believe that the needs of the business owners should drive when financial statements should be completed, not when it is convenient for us.
We take pride in the trust given to our statements by financial institutions, business owners, government agencies and other taxing authorities.