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