Independent Review vs Compilations and Audits

It is sometimes difficult to determine when to do an Independent Review verses a Compilation, or even an audit of financial statements. Set out below is a basic guideline on how to prepare financial statements, and the appropriate framework. Companies with a  Public Interest Score lower than 100, can always Select to be Independently Reviewed or audited if they so volunteer.

Compilations

Your Public Interest Score (‘PIS’) determines when your financial statements need to be  independently reviewed, or whether a compilation should be  performed. When a company is owner managed and the public interest score is less than 100, it is not excepted to carry out an audit  or an independent  review.

Audits

Audits are required when the Public Interest Score:

• Is higher than 350 for any company
• Is between 100 and 349 for internally Compiled financial statements

For owner managed businesses whose PSI score is between 100 and 349, a compilation may suffice given the active involvement of the owner.

Independent Reviews

Independent Reviews apply to non-owner managed businesses where the Public Interest Score is below 349.