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  • Intended for use by lenders and other outside parties with a basic level of assurance on the accuracy of financial statements

  • Typically appropriate as a business grows and is seeking larger and more complex levels of financing and credit

  • CPA issues review report

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The review service is one in which the CPA performs analytical procedures, inquiries and other procedures to obtain "limited assurance" on the financial statements and is intended to provide a user with a level of comfort on their accuracy.  The review is the base level of CPA assurance services.

Similar to a compilation, the CPA is required to determine whether he is truly independent.  If he determines that he is not independent, the CPA cannot perform the review engagement.

In a review engagement, your CPA is required to understand the industry in which you operate - including the accounting principles and practices generally used in the industry.  Your CPA is also required to obtain knowledge about you - including your business and the accounting principles that you use - sufficient to identify areas in the financial statements where it is more likely that material misstatments may arise.

A review is substantially narrower in scope than an audit.  A review does not contemplate obtaining an understanding of your business's internal control; assessing fraud risk; testing accounting records through inspection; observation; outside confirmation or the examination of source documents or other procedures ordinarily performed in an audit.

In a review engagement, the CPA will issue a formal report that includes a conclusion as to whether, based on the review, he is aware of any material modification that should be made to the financial statements in order for them to be in accordance with the applicable financial reporting framework.

A review typically is appropriate as a business grows and is seeking larger and more complex levels of financing and credit.  It is also useful when you, as the business owner, are seeking greater confidence in your financial statements for the purpose of evaluating results and making key business decisions.

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