Many companies provide their financial statements, along with a Registered Professional report, to lenders, investors, suppliers and customers. Informed readers of the report will gain varied levels of comfort based on the type of financial statement provided.

Not all reports are the same. A Professional Accountant can provide different levels of service related to a company’s financial statements.

The three general levels of financial statement service are audit, review and compilation. When do you need an audit? Businesses should work with their external accountants to determine what their real needs are so they can decide the right level of service. Is the need for the financial statement a debt covenant requirement? Shareholder use? Regulatory requirement? Performance measurement? Or perhaps compensation calculation?

With a clear understanding of what is needed, the correct decision can be made appropriately without wasting resources.


What is an audit?

An audit is the highest level of financial statement service provided. The purpose of having an audit is to provide financial statement users with an opinion by the independent registered auditor on whether the financial statements are prepared in accordance with the proper financial reporting framework. An audit enhances the degree of confidence that intended users, such as lenders or investors, can place in the financial statements.

The auditor obtains reasonable assurance about whether the financial statements as a whole are free from material misstatement, and whether the misstatements are from error or fraud.

To obtain reasonable assurance, items are observed, tested, confirmed, compared or traced based on the auditor’s judgment of their materiality and risk. After gathering appropriate evidence through this process, the auditor issues an opinion about whether the financial statements are free from material misstatement.

As an additional benefit, the auditor may become aware of some deficiencies in internal control or weaknesses in the organization’s systems and offer suggestions for improvement. Some of the more important auditing procedures include:

  • Inquiring of management and others to gain an understanding of the organization itself, including operations, financial reporting and known fraud or error
  • Evaluating and understanding the internal control system
  • Performing analytical procedures as expected or unexpected variances in account balances or classes of transactions appear
  • Testing documentation supporting account balances or classes of transactions
  • Observing the physical inventory count
  • Our Audit team ensure and take every possible measure that our work is completed within the ambit of legislative structures. We adopt and apply all the latest Financial Reporting Standards and techniques.  By continued upgrading technology systems and software, our audit teams remain at the forefront of the latest sophisticated Financial Reporting trends.

All our audits is performed under the auspices and approval of an affiliated independent registered auditor thus ensuring the Best Practice audit procedures with strict client relations and independency.

We take the time to properly understand the nature of the business so that we can identify solutions to challenges and offer real contribution to the efficiency and profitability of your business.

Marican gets involved in all phases of an audit. This allows our clients more face time and direct access to our professional team who can offer you proactive and value-added advice.

What is a review?


A review engagement is conducted to provide limited assurance that there are no material modifications that should be made to the financial statements for them to be in conformity with the financial reporting framework.

A review differs significantly from an audit. Review engagements provide less assurance to the reader of the financial statements because the CPA does not perform many audit procedures. The broad review procedures required to be performed by a professional accountant are:

  • Inquiries as to the accounting practices and principles used by the business
  • Procedures for recording and accumulating financial information
  • Actions taken at owners’ or directors’ meetings
  • Written representations from management regarding the accuracy of all information given to the CPA
  • Receipt of all relevant information by the CPA
  • Management’s responsibility for internal control
  • Management’s responsibility to prevent and detect fraud
  • Knowledge of fraud
  • Information related to any significant subsequent events
  • Analytical procedures regarding comparisons
  • Expectations developed by the CPA of recorded amounts
  • Ratios from recorded amounts
  • Plausible relationships of recorded amounts

These analytical procedures provide better understanding of key relationships among certain numbers. This understanding gives more assurance about the reasonableness of the financial condition presented in the financial statements.

Based on the inquiries and analytical procedures, the professional accountant is able to express only limited assurance that there are no material modifications that should be made to the financial statements for them to be in conformity with the applicable financial reporting framework.

Because a review engagement is substantially less intensive in scope than an audit, the professional accountant cannot express an opinion on the fairness of the financial statements taken as a whole.


What is a compilation?

In a compilation engagement, the objective is to assist management in presenting financial information in the form of financial statements without undertaking to provide any assurance that there are no material modifications that should be made to the financial statements so they will conform to the acceptable financial reporting framework. Because of the even more limited scope of compilation procedures, the professional accountant’s report will not express an opinion or provide any assurance regarding the financial statements.

A compilation involves (1) gaining a general understanding of your business, accounting principles used and financial reporting system and (2) presenting financial information in the accepted format of proper financial statements. The professional accountant expresses no assurance about the accuracy of the financial statements presented. The report attached to the financial statement emphasizes that the service is a compilation.

While independence is required at the other levels of service, the professional accountant does not have to be independent of your organization to perform a compilation. The report must state that the accountant is not independent.

Further options lie within the compilation level of service. The compilation report may be a full disclosure report with complete footnote explanations of certain amounts and policies contained in the financial statements. Or, these otherwise required disclosures may be omitted. Omission of this information is not permissible under the other levels of service.


We ensure and take every possible measure that our work is completed within the ambit of legislative structures. We adopt and apply all the latest Financial Reporting Standards and techniques.  By continued upgrading technology systems and software, our audit teams remain at the forefront of the latest sophisticated Financial Reporting trends.

Whether you’re a listed or unlisted company; family owned or privately-held, we will get to know your business inside-out. We take the time to properly understand the nature of the business so that we can identify solutions to challenges and offer real contribution to the efficiency and profitability of your business.

Marican gets involved in all phases of an audit. This allows our clients more face time and direct access to our professional team who can offer you proactive and value-added advice.

Independent reviews offers assurance. Marican conducts thorough, professional reviews for your business and offers suitable solutions and suggestions.

We strive to know our client’s businesses inside-out so that we can help you identify material misstatements. We also identify any material misstatements risks.

Our professional team will perform analytical procedures and carry our relevant enquiries when performing a review in order to acquire sufficient and appropriate evidence.