Follow Ryan Facebook
Email Ryan Email
Financial
Feb 28, 2019

Review vs. Audit: What’s the Difference?

Sponsored Content provided by Ryan Skuce - Partner, Earney & Company, LLP

There are different levels of assurance engagements that CPAs can perform. A review has a lower level of assurance with less testing performed on the financials, while an audit provides a higher level of assurance with substantially more testing of the financials.
 
Below we go into further detail on these differences and how to determine which engagement meets your needs.
 

Review

According to the American Institute of Certified Public Accountants (AICPA), the governing body for certified public accountants, the purpose of a review is to obtain a limited level of assurance the financial statements are in accordance with the applicable financial reporting framework.
 
Typically, the CPA will obtain limited assurance through a variety of analytical procedures and inquiries. A review report is issued indicating whether the CPA is aware of any material modifications that should be made to financials.
 
Once the review is complete, the business or organization can provide the review report to lenders and third-party users. The report is commonly requested when seeking large levels of financing or credit approvals. The review service will also help business owners or management gain a better understanding of their financial position in order to make key decisions.
 

Audit

An audit provides the highest level of assurance to outside users of the financial statements. During an audit engagement, the objective is to obtain reasonable assurance about whether the financial statements, as a whole, are free of material misstatement. In addition, CPAs are required to report any significant or material weaknesses in the business’s internal controls.
 
The scope of an audit is more thorough than a review. They require more time and effort on part of the CPA and business or organization. To obtain reasonable assurance, a significant amount of testing is performed on the financial information by inspecting, observing, confirming with outside parties, and examining source documents.
 
Businesses or organizations usually engage in audits when they are trying to obtain higher levels of financing, but also when they are seeking outside investors or during mergers and acquisitions. The CPA will issue an audit report intended to provide these outside parties with a high, but not absolute, level of assurance about the financials.
 

Conclusion

An audit requires more time commitment from the company and CPA in order to provide more assurance to the report users. A review is far less in scope but does express an opinion on the financial statements as a whole. Your CPA will be pleased to discuss these services with you.

Ryan Skuce joined Earney & Company, L.L.P. in 2003, and became a partner in November 2013. He works extensively with physicians, medical practices, and large medical groups. Ryan has experience in accounting and tax services including financial reporting and analysis, technical support, cash flow planning, physician compensation strategies, and medical practice strategic planning. He also has experience in the areas of accounting and tax for a variety of for profit and nonprofit clients. Ryan is currently a member of the American Institute of Certified Public Accountants (AICPA) and the North Carolina Association of Certified Public Accountants (NCACPA). Ryan works with his clients on evaluating operational and technical issues. He provides back-office accounting support, and recommends and assists in the implementation of ideas to cut overhead costs and streamline operations. With an in-depth knowledge of existing and proposed tax laws, Ryan often advises companies on tax deferment or savings through proactive structuring of transactions. He also assists his clients with Internal Revenue Service audits. He received his Masters of Science in Accountancy from UNC-Wilmington and resides in Wilmington, where he enjoys playing hockey with a local team.

Ecolarge 1016184145
Ico insights

INSIGHTS

SPONSORS' CONTENT
Jim ellis headshot 10311631058

Questions to Ask Before Choosing a Digital Agency

Jim Ellis - Signal
Chris coudriet

Purpose-Designed Government Center and Redeveloped Land Will Benefit the Community

Chris Coudriet - New Hanover County Government
Natalieenglish 3301715113

Advocacy: The Heart of the Chamber

Natalie English - Wilmington Chamber of Commerce

Trending News

In Wrightsville Beach, Office Building Sells For $1.3M

Cece Nunn - Aug 19, 2019

Pawsome News: New Pet Daycare And Retailers Opening In Wilmington

Johanna Cano - Aug 20, 2019

Public Forums Draw Questions About NHRMC's Future

Vicky Janowski - Aug 20, 2019

SummerFest 19 To Include Street Food Cook-off At Battleship Park

Jessica Maurer - Aug 21, 2019

Drift Coffee  & Kitchen Now Open At Mayfaire 

Jessica Maurer - Aug 21, 2019

In The Current Issue

MADE: For Retailer, It's In The Bag

Find out more about Holly Aiken Bags, a company that creates handbags and accessories handmade in Wilmington and Raleigh....


Advocating For Realtors

Anne Gardner, the new CEO of Cape Fear Realtors, talks about her role leading one of the region's largest trade associations....


ILM Passenger Numbers Trending Up

The number of travelers using the growing Wilmington International Airport has soared each month in 2019 compared to the same month the prev...

Book On Business

The 2019 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

WILMA's Leadership Accelerator
Power Breakfast - The H Word (June 13, 2019)
2019 WilmingtonBiz Expo Keynote Lunch - CEO, nCino, Pierre Naude`