What is a Review?

CPAs can provide "limited assurance" that financial statements require no material modification for them to conform to a comprehensive basis of accounting. These reviews provide a limited level of assurance on financial statements. As with an audit, the assurance is based on reasonableness, not exactness. As with an audit, the CPAs must be independent of having any financial involvement with the organization. A review, however, is substantially less in scope than an audit.

Review procedures typically involve inquiries of company personnel and analytical procedures, including comparison of current year with prior period financial data to identify unusual items or trends. The CPA obtains information about the organization, including its methods of operation and its products or services, record keeping, changes in business activity, and actions of the board of directors.