Three engagements, three different outcomes
An audit provides reasonable assurance and an opinion on financial statements under the applicable framework. Reasonable assurance is high, but not absolute. It does not mean every transaction has been checked or every fraud will be found.
A review provides limited assurance. It typically relies primarily on enquiry and analytical procedures, with additional work where required. A compilation involves accounting expertise to assist in preparing and presenting financial information and provides no assurance.
The recipient's requirement comes first
Before comparing cost, identify why the report is needed and who will use it. A law, free-zone authority, lender, investor or contract may specify an audit or another form of reporting. A review or compilation cannot simply be substituted because it is quicker or less expensive.
Obtain the recipient's requirement in writing where possible. Ask whether it concerns a complete set of financial statements, a specific schedule or a separate reporting purpose.
Compare responsibilities and deliverables
- **Audit:** independent assurance work and an audit report reflecting the evidence obtained.
- **Review:** a limited-assurance engagement and a report appropriate to that scope.
- **Compilation:** assistance with financial information, without an assurance conclusion.
Management remains responsible for the underlying information and relevant judgements. Appointment of a practitioner does not transfer responsibility for complete records and explanations.
Avoid shortcuts based on company size
A startup can face an audit requirement, while a larger entity may need several different reports for different purposes. Size and budget are relevant to planning, but they do not alone determine the correct engagement.
Likewise, a compilation is not automatically unusable outside management. Acceptance depends on the recipient and purpose; it must not be presented as audited or reviewed information.
Prepare the engagement brief
State the entity, period, accounting framework, intended users, reason for the work and submission timetable. Provide the trial balance, previous statements and details of unresolved balances. Ask the practitioner to confirm scope, ethical requirements, information needs and report form.
Can an engagement guarantee the accounts contain no errors?
No. Read the assurance level and limitations. Even an audit provides reasonable rather than absolute assurance.
Sources and further reading
Official references checked during the 24 October 2026 refresh. Application details and requirements can change; use the current source for the relevant entity and period.
