By definition, assurance is a positive declaration intended to give confidence; a promise. The promise comes in the form of a technical opinion on the financial statements that can come in a variety of forms. The financial statements themselves are usually created using an accounting framework, most of which follow the General Purpose Framework but others can have a Special Purpose Framework usually found in specialized industries. The opinion given on the financial statements using the given framework is given while making reference to “in all material respects” or in other words, it is accurate within the bounds of a level that would not impact the economic decision making  of the users of the financial statements.

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For more information  on understanding assurance engagements see the following link on understanding Financial Statements produced by CPA Canada.

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Audit Services

These types of engagements provide a positive declaration that the financial statements are free from material errors. They represent the highest form of assurance a client can receive and can enhance a user’s confidence in the numbers expressed. 

Audits are rigorous and require management, with oversight from those charged with governance, to produce the financial statements subject to the audit. We, acting as auditors, would assess the internal controls of the entity to produce the financial records and utilize our testing methodologies to form our opinion.

Review

These types of engagements provide a negative declaration that nothing has come to our attention to lead us to believe that the financial statements are not presented fairley. This is a form of limited assurance and is purposeful as the procedures performed are substantially less in nature and extent than those performed in an audit. We, acting as practitioners, primarily focus on inquiry and analytical procedures to reach our opinion. Reviews still provide confidence to users of the financial statements and represent the “middle-ground” level of assurance between audits and compilations. 

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Compilation

These types of engagements provide no official opinion and therefore no assurance. They are best for those owners, management and other users who do not need financial statements containing all the disclosures normally required under a general purpose framework nor assurance. The financial statements are usually generated based on information provided by management and are typically done in connection with an entity’s tax return.

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