Visual description of the difference between audits, reviews, and compilations

Here is a visual picture that illustrates the different comfort levels someone can draw from financial statements that have been audited, reviewed, or compiled by a CPA. 

Here is a picture of assurance levels from reports issues by CPAs.

We CPAs use the word ‘assurance’ when we talk about this concept.  This means how much can a reader of the financial statements rely comfort did the accountant obtain before issuing  a report on the on the accountant’s report and the accompanying financial statements.

The concept for the picture above is from the 2010 AICPA NAATS conference.  The concept was relayed by a presenter at the Inland Empire chapter of the California Society of CPAs.  I don’t know who made the original presentation.  If I find out, I shall provide appropriate credit.  I have modified the concept in several ways based on my years experience working in the audit profession.

This issue is discussed further in the following post.

(updated 4-4-12)

1 thought on “Visual description of the difference between audits, reviews, and compilations”

  1. Pingback: Filling up a bucket – word picture for levels of assurance in audit, review, and compilation « Attestation Update – A&A for CPAs

Leave a Comment

Your email address will not be published. Required fields are marked *