What Is a Review Engagement in Canada and When Do You Need One?

Running an organization such as non-profit in Canada comes with a lot of responsibility, especially when it comes to financial transparency. Stakeholders want assurance that your financial statements are accurate, but not every organization needs a full audit. That’s where a review engagement comes in.

Many small and mid-sized organizations find themselves asking the same question: “What is a review engagement in Canada?” The answer can help you save money, meet compliance requirements, and still give lenders and investors the confidence they need.

According to CPA Canada, a review engagement provides limited assurance on your financial statements. It’s less extensive than an audit but more reliable than a basic compilation. It strikes a practical balance between cost and credibility, making it ideal for businesses that need accountability without the depth or price tag of an audit.

Understanding What a Review Engagement Is in Canada

A review engagement is a form of assurance service performed by a Chartered Professional Accountant (CPA), who has a Public Accounting License. The accountant reviews your financial statements to determine if anything seems misstated or inconsistent.

The key difference is how deep the review goes. Unlike an audit, a review engagement does not involve testing transactions or verifying every figure with supporting documents. Instead, the CPA performs analytical procedures and asks management questions to assess whether the financial statements appear reasonable.

At the end of the process, the accountant provides a “Review Engagement Report” that states the financial statements are “plausible” and free from material misstatement. This limited assurance is often enough to satisfy lenders, investors, or board members who require a level of financial verification.

When Do You Need a Review Engagement in Canada?

You might need a review engagement for several reasons; some legal, others practical.

Provincial Rules

Each province sets thresholds for non-profits under its legislation. For example:

· In Ontario, corporations earning between $100,000 and $500,000 in annual revenue can opt for a review engagement instead of a full audit.

· In British Columbia, societies can choose a review engagement if their bylaws allow it and their annual revenue is below a certain threshold.

These thresholds make review engagements an affordable alternative for smaller organizations that still want assurance.

Internal or Member Requirements

Many organizations include a requirement for review engagements in their bylaws. This ensures members or boards receive financial statements that have been checked by a CPA.

Credibility with Stakeholders

A review engagement adds credibility to your financial reporting. It gives donors, grant agencies, and suppliers confidence in your accounting practices, which can be essential for maintaining long-term relationships.

What to Expect During a Review Engagement

A review engagement follows specific procedures set by CPA Canada’s CSRE 2400 standards. Here’s what typically happens:

· The CPA meets with management to understand the business, operations, and accounting system.

· Analytical procedures are used to compare financial results across periods or against budgets.

· The CPA asks management about any unusual fluctuations or significant transactions.

· If issues arise, management may be asked to provide clarification or supporting documentation.

Once the review is complete, the accountant issues a Review Engagement Report, which states that nothing has come to their attention to suggest the financial statements are not fairly presented.

This report increases the credibility of your financial statements without the depth or cost of an audit.

Why a Review Engagement Matters

Choosing a review engagement isn’t just about compliance. It’s also about financial confidence. It helps:

· Strengthen trust with banks and funders.

· Reduce errors and improve reporting accuracy.

· Show accountability without overburdening small teams.

For many Canadian businesses, a review engagement is the perfect middle ground, clear, affordable, and efficient.

Assurance That Fits Your Goals.

Spectrum Chartered Professional Accountants provides professional assurance services that bring clarity and confidence to your financial reporting. Their team of accounting consultants delivers thorough accounting engagements for Canadian businesses, helping you meet compliance standards without unnecessary costs.

Contact them today to discuss your needs and keep your financial statements accurate, clear, and credible.

Author’s Bio

Kelly M. is a professional content writer specializing in finance, accounting, and business compliance topics. She creates clear, engaging, and fact-based articles that help Canadian businesses and non-profits understand complex financial regulations with ease.