Independent review versus compilation: what is the difference?

A compilation and an independent review are different services. The appropriate outcome depends on the entity, its Memorandum of Incorporation, owner-management, Public Interest Score and other facts.

Compilation

In a compilation engagement, financial information supplied by management is used to prepare financial statements in an appropriate format. A compilation does not provide assurance on the statements.

Independent review

An independent review is performed by an eligible independent reviewer and provides limited assurance through enquiries and analytical procedures. It can also carry reporting duties relating to reportable irregularities.

Why the Public Interest Score matters

CIPC guidance links audit and independent-review requirements to factors including the Public Interest Score, whether statements are compiled internally or independently, whether owners manage the company and whether the MOI requires an audit. Thresholds and eligibility rules should be assessed for the specific year and entity.

Practical next step

Calculate the Public Interest Score, review the MOI, confirm who manages the company and identify how the financial statements are compiled before deciding on the engagement.