A review engagement is typically requested by stakeholders in a company (which may include a bank, shareholders, etc.) to ensure that the figures within the financial statements are plausible. The accountant will perform a number of analytical procedures, as well as engage in discussions with the client, to ensure that the financial statement information is reasonable and plausible. If the CPA finds that the amounts in the financial statements are plausible, a review engagement report is provided.
A review provides negative assurance, which is a basic, low level of assurance, meaning that nothing has come to the attention of the accountant that would lead them to believe that the financial statements are not in accordance with Accounting Standards for Private Enterprises (ASPE).
Some not-for-profit organizations and other businesses are required to have Review Engagement Financial Statements by governing bodies or banks/lenders in order to comply with requirements set out by those particular stakeholders.
An audit engagement builds upon the procedures performed in a review engagement. In addition to the analytical and discussion procedures, the CPA will perform what is referred to as substantive procedures. Substantive procedures are a more in depth examination of the materials that back-up the figures that make up the financial statements, These procedures can include physically examining invoices and purchase orders, physically observing that inventory exists, etc.
In addition to the substantive procedures, the accountant must obtain an understanding of the organization's internal controls, and review them for any significant deficiencies.
The CPA, or Auditor, will provide an audit report once the engagement is complete. The level of assurance provided is much higher than a review engagement, and indicates that the company’s financial statements are free of material misstatement.
Cogent CPA LLP has substantial audit experience in many not for profit and for profit organizations including (but not limited to): charitable organizations, rural municipalities, condo corporations, towns, cities, co-operatives, religious institutions, school divisions, First Nations bands, and sports organizations.