In an audit engagement, the objective for an independent professional public accountant is to express an opinion on the fairness of your financial statements in accordance with Accounting Standards for Private Enterprises (ASPE) or International Financial Reporting Standards (IFRS). An auditor will test and gather evidence in order to obtain reasonable assurance that the financial statements are free of material misstatement. Audited financial statements are widely used for your bank, reporting to owners/partners or shareholders, and government.
In a review engagement, the objective is to review your financial statements to determine whether they are plausible by following the Accounting Standards for Private Enterprises (ASPE) or International Financial Reporting Standards (IFRS). Review engagements are commonly requested by your banker when you have business loans, bonding for your construction business, a prior owner/partner or shareholder that you purchased the business from or for a variety of reasons you want more than a compilation. Reviews provide limited assurance that your financial information conforms to Canadian Generally Accepted Accounting Principles (GAAP).