What is the difference between “compiled”, “reviewed”, and “audited” financial statements?
The primary difference between these three types of financial statement services (typically provided by an accountant) is the level of assurance. In a compilation engagement, the accountant provides no assurance as to whether the financial statements are prepared in accordance with generally accepted accounting principles. A compilation presents, in the form of financial statements, information that is the representation of management. In a review engagement, the accountant provides limited assurance that there are no material modifications that should be made to the financial statements in order for them to be in conformity with generally accepted accounting principles. In an audit engagement, the accountant renders an opinion that the financial statements are presented in accordance with generally accepted accounting principles. Due to the different levels of assurance being provided by an accountant in the three types of engagements, the procedures necessary to complete each type of
