Review Engagements

Limited assurance under CSRE 2400 in Canada and ISRE 2400 in the UK, for companies that need independent eyes on the numbers without the cost and scope of a full audit.

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Audit, review or neither?

The right level of assurance depends on who reads your financial statements and what they decide on the strength of them. A good number of private companies are paying for an audit that nothing actually requires.

Criterion	Audit	Review engagement	Neither
Level of assurance	Reasonable. A positive opinion that the statements present fairly.	Limited. A negative conclusion: nothing has come to our attention.	None. Statements are prepared but not independently examined.
What we do	Substantive testing, confirmations, an understanding of internal control, evidence across the whole balance sheet.	Inquiry and analytical procedures, with specific work on estimates, related parties, going concern and fraud risk.	Preparation and compilation only.
Typically wanted by	Statute, regulators, lenders on larger facilities, and buyers in a transaction.	Boards, smaller lending facilities, minority shareholders, and parent companies consolidating a subsidiary.	Nobody external.
Relative cost	Highest	Materially lower	Lowest
Best when	You are regulated, listed, transacting, raising money, or carrying real estimation risk.	You want independent scrutiny and a proportionate fee, and nothing in law or contract demands more.	You are small, unregulated, and no third party relies on the numbers.

Standards differ by jurisdiction. Canadian reviews are performed under CSRE 2400 and UK reviews under ISRE 2400 (UK). Both give limited assurance and both are considerably more structured than the older review standards they replaced.

What a review actually involves

A review is not an audit with less effort applied. It is a defined engagement with its own standard, its own procedures and its own report. The practitioner performs inquiry and analytical procedures across all material items, including disclosures, and focuses attention on the areas where a material misstatement is most likely to arise.

It also requires specific work that people often assume is audit-only: inquiries on related parties, significant accounting estimates, going concern, fraud risk and non-compliance with laws and regulations. There is two-way communication with management and those charged with governance, and all accumulated misstatements are communicated with a request that they be corrected.

What a review does not include is substantive testing, third party confirmations or an assessment of internal control. That is the trade, and it is the reason a review costs materially less than an audit while still putting an independent, qualified practitioner through your numbers.

The conclusion is expressed negatively. Nothing has come to our attention that causes us to believe the financial statements are not presented fairly, in all material respects. That wording is precise rather than evasive, and it is what tells a reader exactly how much work sits behind it.

Where a review is the right answer

It usually fits when

No statute or regulator requires an audit
A lender or investor wants independent scrutiny but has not specified an audit
A parent company needs comfort over a subsidiary it consolidates
A minority shareholder wants assurance that the majority is not marking its own homework
The business is stable, the accounting is straightforward, and estimation uncertainty is low
An audit fee is genuinely disproportionate to the size of the entity

It is the wrong choice when

Statute or your articles require an audit
A funding agreement or covenant specifies audited financial statements
You expect a sale, a raise or a listing within about two years
There is significant estimation risk, complex revenue or going concern uncertainty
You have had a control failure or a suspected fraud
The board wants the level of comfort only an audit provides

How an engagement runs

A review is a shorter process than an audit, and it should feel like one. This is the shape of ours.

Step 1

Scoping conversation

We establish what is driving the requirement, who will read the statements, and whether a review genuinely satisfies it. If it does not, we say so before you engage us rather than after.
Step 2

Fixed fee agreed

A budget prepared against the scope, then a fixed fee agreed before any work starts. Scope changes are discussed with you before the work, not billed afterwards.
Step 3

Information request

A single, specific list. Trial balance, reconciliations, the significant judgements and the supporting documents we will need, sent early so nothing waits on us.
Step 4

Inquiry and analysis

Analytical procedures across the balances and results, with targeted inquiries on estimates, related parties, going concern and anything the analysis flags as unexpected.
Step 5

Discussion and conclusion

We raise what we found, discuss any misstatements and agree corrections, then issue the report. A partner reviews and signs, as on every engagement.

Common questions

Will my bank accept a review engagement?

It depends on the facility and the lender. Credit agreements normally specify the level of assurance required, and smaller facilities more often permit a review while larger facilities usually require an audit. Check the covenant wording rather than assuming, and if you are unsure send it to us and we will read it.

How much less does a review cost than an audit?

Materially less, because the procedures are narrower. The exact difference depends on the size and complexity of the business, so we budget each engagement individually and give you a fixed fee before you commit.

Is a review quicker?

Yes, usually substantially. There is no substantive testing, no confirmations and no controls work, so both the fieldwork and the demands on your team are lighter. Good preparation still shortens it further.

Can we move to an audit later?

Yes, and many companies do as they grow or as a transaction approaches. Moving from a review to a first audit means the auditor has to satisfy themselves about opening balances, so it is worth planning the year you make the change rather than deciding at the year end.

Who can perform a review engagement?

In Canada and the UK a review is performed by a qualified practitioner under CSRE 2400 or ISRE 2400 respectively. In South Africa an independent review is performed by a registered auditor or a member of an accredited professional body, depending on the public interest score.

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