Compilation, review or audit: what to actually ask a provider for

You've got to file something with CIPC or provide statements to a lender, and you know you need professional help with your year-end financials. But the industry uses three different terms—compilation, review, and audit—and they're not interchangeable. They differ wildly in cost, time, depth, and what they actually certify. Picking the wrong one wastes money; picking the right one means you get exactly what you need and nothing more.

The core trade-off is between cost and assurance. A compilation is the lightest touch—the accountant organises your numbers into a standard format but doesn't verify them independently. A review sits in the middle: the provider tests the figures, asks questions, and gives some assurance that nothing looks materially wrong. An audit is the gold standard—a thorough, statutory examination that gives reasonable assurance the statements are true and fair. Each costs more and takes longer than the last. Most small to medium companies actually need a compilation, not an audit. But if you don't know the difference, you might pay for an audit you don't need, or worse, file a compilation when a review was what the bank or regulator expected.

Understand what each service actually does

A compilation is bookkeeping elevated to statement level. The accountant takes your trial balance, your invoices, your bank statements, and your ledgers, and formats them into the standard AFS structure. They check the arithmetic, flag obvious errors, and make sure the numbers tie together. They do not independently verify that your sales figures are real, that your inventory count is accurate, or that your receivables actually exist. It's fast and cheap. It's perfectly fine for internal management or for a small company filing dormant returns.

A review is a step up. The accountant performs analytical procedures—comparing this year's numbers to last year, checking ratios, asking why items have moved significantly. They request written representations from management and test a sample of transactions. They're not doing a full audit, but they're doing enough work to spot material misstatements. A review gives some assurance; it means a qualified professional has looked under the bonnet and found nothing that looks seriously wrong. Banks and credit providers often ask for a review.

An audit is the comprehensive investigation. The accountant examines evidence, observes inventory counts, confirms receivables with customers, tests internal controls, and applies statistical sampling across transactions. They then express an opinion that the statements give a true and fair view. This is what larger companies, regulated entities, and public funders typically require. It's also significantly more expensive and intrusive.

Ask the right screening question first

Before you even approach a provider, find out what the person asking for your statements actually wants. Is it CIPC for a shelf company filing? A bank for a loan? A grant funder? A landlord? Your business partner? Each has different expectations. CIPC doesn't mandate a particular level for smaller companies—a compilation can suffice. A bank or funder might specify "audited" or "reviewed." Your partnership agreement might have a clause. A landlord usually wants to see compiled statements so they can trust the income figures.

Once you know what's actually required, you'll avoid the trap of over-servicing. Many accountants default to offering an audit because it's the most prestigious, but if a compilation meets the requirement, you're paying for reassurance you don't need.

What to ask the provider

When you get a quote, ask these questions clearly:

• What level of service are you quoting for—compilation, review, or audit?
• What will you do to verify the numbers I give you?
• How long will this take from start to finish?
• What happens if you find errors or inconsistencies?
• Will you produce a written report, and what will it say?
• Do you need me to represent in writing that the information I've given you is complete and accurate?

If the provider is vague about the difference between these three services, that's a red flag. They should be able to explain clearly what work they'll do and what assurance you'll get in return.

A good provider will also ask you what the statements are for, because that determines what's appropriate. Then you're not guessing—you're making a deliberate choice. You can find verified accountants on Strove who specialise in annual statement preparation and can walk you through exactly which service fits your situation.