Understanding Your Year-End Engagement Options
Every business is unique – and so are its financial reporting needs. At year-end, the type of financial statement engagement you require depends on your financial goals, obligations, and the level of assurance your stakeholders expect. Whether you need simple financial statements to file your taxes or a more detailed report for lenders or investors, we’re here to guide you through the right level of service for your business.
Below is a quick overview of the three primary engagement types and what you can expect from each. Continue reading for more details on what each engagement has to offer.
Compilation Engagement (Low Level of Assurance)
A Compilation engagement is the most common type of financial statement engagement for small and mid-sized businesses. It is designed to provide a clear snapshot of your company’s financial results based on the information you provide, along with any necessary adjustments we identify during our review. The final results are typically a concise set of financial statements prepared alongside your corporate tax returns. Since we do not verify the accuracy of the information, no assurance is provided, making this the most cost-effective and time efficient option.
Compilations are ideal if your business does not require lender or investor reporting and simply needs financial statements for tax purposes and internal records.
Review Engagement (Medium Level of Assurance)
A Review builds on the Compilation process and provides limited assurance that your financial statements are free from material misstatements. While we still begin with your accounting records, the process involves more detailed inquiries, discussions and analysis to ensure the numbers make sense and are reasonably accurate. The resulting financials are more in-depth and provide additional clarity and transparency. Reviews are often required by banks for certain levels of financing and can also be valuable if you are considering selling your business or attracting investors. Due to the limited assurance, this option falls in the mid-range for both cost and time commitment, making it a balanced choice for businesses that need more than a basic Compilation but don’t require the depth of an Audit.
Reviews are a good fit if your stakeholders (i.e. banks, investors or potential buyers) need more confidence in your numbers.
Audit Engagement (High Level of Assurance)
An Audit offers the highest level of assurance available. It builds on the Review procedure but involves a deeper examination of your financial records, source documents and internal controls. While the resulting financial statements often look similar to those prepared under a Review, the accompanying report carries greater credibility. Audits are particularly valuable if you are bringing on external investors or preparing a business sale. Due to the depth of testing and analysis involved, an Audit requires the most time and cost commitment but provides the greatest confidence in accuracy of your financial information.
Audits are typically recommended when there are higher financial stakes, such as securing significant financing, meeting investor expectations or ensuring maximum transparency in a sale or acquisition.
No matter which level of engagement you choose, we are here to help assess your needs and select the best option for your situation.
The above material is current as of October 14, 2025.
The information presented is a general overview and not intended to cover specific situations. You should consult with your professional advisors directly before taking any action.
Vertefeuille Rempel Chartered Professional Accountants LLP, its partners, employees and agents do not accept or assume any liability by anyone relying on the information presented.