Whats the difference between an Audit, Review, and Compilation of Financial Statements?
Audits provide the highest degree of assurance for evaluators. An independent CPA uses various techniques to verify the accuracy of the information in the statement, and then expresses an opinion on the fairness of the financial statements and provides assurance that the underlying data has been tested. The CPA firm the provides written assurance that financial reports are ‘fairly presented in conformity with generally accepted accounting principles (GAAP).’ The measure for ‘fairly presented’ is that there is less than 5% chance (5% audit risk) that the financial statements are ‘materially misstated’.
