What is Audit, Review, and Compilation?

An audit is the highest level: the CPA independently verifies balances, tests internal controls, and issues an opinion. A review provides limited assurance through analytical procedures and inquiry. A compilation simply presents management's figures in proper financial-statement format with no assurance.

Which one you need depends on state law, the governing documents, and often an annual revenue threshold. Many statutes require an audit above a set revenue level and permit a review below it.

Beyond compliance, an audit is the board's main external check on internal controls — particularly important where a single person handles both deposits and disbursements.