Bob GauvreauAsk Bob Gauvreau Questions Based On His Training

Audit vs. Review Engagement #shorts

5 Dec 2023 · 1 min

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Short YouTube explanation by Bob Gauvreau contrasting audit, review, and compilation engagements. He explains audits provide the highest level of assurance and are less common and more expensive; review engagements are more common, involve analytical review and queries (often used for bank borrowing), and compilations are the simplest form with minimal procedures and often no note disclosures.

Chapters

Audits aren't very common. Now, with an audit, there's extensive work that goes into it, they're more expensive and you're getting a higher level of assurance that your information included is accurate. Now a review engagement, for example, is the next step down. Way more common, especially in higher level businesses that have borrowing with the banks. Review engagement means there is more analytical review over the numbers and assessment and queries into how those numbers come together. But it's not an audit. The last step is a compilation engagement. Now, a compilation engagement is a much more simplified practice for financial statement preparation. So a lot of times in here there aren't even note disclosures on the back end of a compilation agreement.