A compilation (CSRS 4200) is statements assembled by an accountant with no assurance. A review (CSRE 2400) gives limited assurance through inquiry and analysis. An audit (Canadian Auditing Standards) gives reasonable assurance through testing and evidence. Pick the lowest level that every reader of the statements, and the law, will accept.
Compilation engagement (CSRS 4200)
The accountant uses their accounting expertise to help management prepare and present financial information under a stated basis of accounting. They do not test whether your records are right, and the report says so. CSRS 4200 applies to compiled financial information for periods ending on or after December 14, 2021, when it replaced Section 9200, the Notice to Reader standard.
Two features matter to readers. First, the statements must include a note describing the basis of accounting used. A compilation can be prepared on a basis other than ASPE, such as cash or tax basis, and the reader is told which. Second, the report sets out management’s responsibilities and the accountant’s.
Compiled statements are ideal for owner-managed corporations whose only outside readers are the CRA and a lender that does not require more. They are not evidence that the figures are correct.
Review engagement (CSRE 2400)
The practitioner performs mainly inquiry and analytical procedures, such as comparing ratios and trends and asking management to explain what moved. They then conclude, in the negative form, that nothing has come to their attention to suggest the statements are not prepared, in all material respects, under the framework. CSRE 2400 applies to reviews of financial statements for periods ending on or after December 14, 2017, and requires an applicable framework such as ASPE.
Banks with loan covenants and bonding companies commonly ask owner-managed businesses for reviewed statements. Check your agreements before assuming you can drop to a compilation.
Audit (Canadian Auditing Standards)
The auditor plans and performs procedures to obtain reasonable assurance that the statements are free of material misstatement, whether due to fraud or error. Those procedures include testing transactions, confirming balances with third parties, attending inventory counts and evaluating controls. The report gives an opinion. Audits take longer, need more of your staff’s time, and cost the most.
Audits are required when a corporation has not validly waived its auditor, when it is a reporting issuer, or when a lender, investor, regulator or funder requires one.
Choosing between them
- Corporate law first. Has the corporation validly waived an auditor for this year? If not, you need an audit. The waiver rules.
- Then contracts. Read the reporting clauses in your loan agreement, bonding agreement, franchise agreement, shareholder agreement and any grant terms.
- Then plans. If you will be raising money or selling within two or three years, a history of reviewed statements is worth more than compiled ones.
- Then cost. If nothing requires more, a compilation is the sensible default.
The engagement chooser applies this order to your answers.
Questions people ask
Is a review engagement the same as an audit?
No. A review gives limited assurance, mainly through inquiry and analytical procedures, and concludes that nothing came to the practitioner’s attention suggesting the statements are materially misstated. An audit gives reasonable assurance, based on testing and evidence, and expresses a positive opinion. Lenders treat them differently, and covenants usually name one.
Can I switch from a review to a compilation?
You can, if nothing you are bound by requires a review. Check your loan agreement, bonding, franchise agreement, shareholder agreements and any grant terms first. Switching without checking can put you in breach of a reporting covenant.
Can my accountant do a compilation if my bookkeeping is messy?
A compilation does not verify your records, but under CSRS 4200 an accountant cannot be associated with information they believe is false or misleading, and the statements must describe the basis of accounting used. Poor records cost more to compile and may limit what the accountant will put their name to.
Sources
- IAS Plus (Deloitte), summarising the CPA Canada Handbook, CSRS 4200, Compilation Engagements. Read 25 October 2026.
- CPA Alberta, Compilation Engagements — Overview of the New Standard (CSRS 4200). Read 25 October 2026.
- CPA Canada, Audit and assurance alert: Engagements to review historical financial statements (CSRE 2400). Read 25 October 2026.