Compilation, Review, or Audit — what’s the difference?
Three different engagements, three very different deliverables and costs. Banks, shareholders, and the CRA each want different things — this guide tells you exactly what each engagement gives you, and when you actually need one.
Compilation
Your CPA compiles your books into financial statements — no opinion, no testing.
Review
Your CPA performs inquiry & analytical procedures and issues limited (negative) assurance.
Audit
Your CPA performs detailed testing & evidence-gathering and issues a positive opinion.
Side-by-side comparison
The 10 factors that differ between the three engagements.
| Factor | Compilation | Review | Audit |
|---|---|---|---|
| Level of assurance | None | Limited (“negative”) | Reasonable (positive) |
| Standard followed | CSRS 4200 | CSRE 2400 | CAS 200–700 |
| Report issued | Compilation Engagement Report (replaces “Notice to Reader”) | Review Engagement Report | Independent Auditor’s Report |
| What the CPA does | Assembles client-provided info into financial statements; performs basic arithmetic checks; does not verify. | Inquiry, analytical procedures, and discussion with management to identify items that appear materially misstated. | Detailed testing, third-party confirmations, physical inspection, and evidence-gathering sufficient to express a positive opinion. |
| Independence required? | No (must disclose if not independent) | Yes | Yes |
| Reporting framework disclosed | Yes — basis of accounting (e.g., cash, accrual, ASPE) must be on the financial statements | Recognized framework (e.g., ASPE, IFRS) | Recognized framework (e.g., ASPE, IFRS) |
| Typical cost (CAD, SME) | $1,500 – $5,000 | $5,000 – $20,000 | $15,000 – $75,000+ |
| Typical timeline | Days | 2 – 6 weeks | 6 – 16 weeks |
| Notes & supporting schedules required | Minimal — no full disclosure notes required | Full notes per the reporting framework | Full notes plus extensive working papers |
| Common requestor | Owner & tax filings; some smaller lenders | Banks & lenders for mid-sized credit; shareholder reporting | Larger lenders, regulators, government, public companies, non-profits with funder requirements |
Cost and timeline ranges are typical for Canadian owner-managed businesses — the actual quote depends on the size of the entity, the state of the records, and the reporting framework.
When you’d need each.
The right engagement depends on who’s asking and what for. Start here, then talk to us.
When you need clean financials for tax & basic credit.
- You’re an owner-managed business filing T2 corporate tax
- Your bank request is for a small operating line or small mortgage
- Internal management reporting where you trust your own numbers
- You want presentable year-end statements at the lowest cost
When a lender or shareholder wants extra comfort.
- Your bank covenant or larger lender requires a review
- You have outside shareholders who aren’t in the day-to-day
- You’re raising capital or preparing for sale due-diligence
- You need a recognized framework (ASPE) but don’t need a full audit
When the law, a regulator, or a large funder requires it.
- You’re a public company or a reporting issuer
- You’re a not-for-profit or charity with funder audit requirements
- A government grant or contribution agreement requires it
- Your bylaws / shareholder agreement mandate an annual audit
Let’s figure it out together.
A 30-minute chat is usually enough to land on the right engagement for your business, your lender, and your budget — with no obligation either way.
Book a 30-min chat