Review Engagements Mississauga | CPA Review of Financial Statements

Professional Review Engagements for Mississauga Businesses

At Insight Accounting CPA Professional Corporation, we provide comprehensive review engagement services for businesses throughout Mississauga, Brampton, Toronto, and the Greater Toronto Area. Our review engagements deliver limited assurance on your financial statements, providing stakeholders with confidence that your financial information is plausible and free from obvious material errors—at a fraction of the cost of a full audit.

Led by Bader A. Chowdry, CPA, CA, LPA — AI Inventor & AI Specialist, our firm combines deep accounting expertise with innovative Accounting Intelligence technology to conduct thorough review engagements that comply with CSRE 2400 standards while delivering exceptional value to our clients.

What Is a Review Engagement?

A review engagement is a professional assurance service where a Chartered Professional Accountant (CPA) obtains limited assurance that the financial statements are plausible and free from obvious material errors. Unlike a compilation, which provides no assurance, or an audit, which provides reasonable assurance, a review engagement strikes a balance between cost and assurance level.

Understanding Limited Assurance (Negative Assurance)

In a review engagement, the CPA provides limited assurance (also known as negative assurance). This means:

The CPA performs inquiry and analytical procedures to assess whether the financial statements are plausible
Based on these procedures, nothing has come to the CPA’s attention that causes them to believe the financial statements are not prepared, in all material respects, in accordance with the applicable financial reporting framework
The assurance is “negative” because the CPA is stating what they did NOT find, rather than making a positive statement about what IS true
Users receive confidence that obvious material misstatements would have been identified

This limited assurance is valuable for lenders, investors, and other stakeholders who need more confidence than a compilation provides but cannot justify the cost of a full audit.

CSRE 2400 Standards for Review Engagements

CSRE 2400 (Review Engagements) is the Canadian Standard on Review Engagements that governs review engagements performed by Canadian CPAs. This standard establishes the requirements and guidance for accountants when performing review engagements.

Key Requirements Under CSRE 2400:

1. Independence
Unlike compilation engagements, review engagements require the CPA to be independent from the client. This means the accountant must:

Not hold any financial interest in the client
Not participate in management decisions
Maintain objectivity and impartiality throughout the engagement

2. Understanding the Entity and Environment
The CPA must obtain sufficient knowledge of:

The client’s business and industry
The applicable financial reporting framework
The entity’s internal control systems
Relevant regulations and legal requirements

3. Inquiry and Analytical Procedures
The CPA must perform:

Inquiry: Questions of management and others within the entity about financial and operational matters
Analytical procedures: Evaluation of financial information through analysis of plausible relationships among both financial and non-financial data

4. Professional Skepticism
Throughout the engagement, the CPA must maintain an attitude of professional skepticism, recognizing that circumstances may exist that cause the financial statements to be materially misstated.

5. Documentation
Comprehensive working papers must be maintained documenting:

The procedures performed
The evidence obtained
The conclusions reached
Significant matters encountered

6. Reporting
A formal Review Engagement Report must be issued that:

States that a review has been performed
Describes the scope and procedures
Provides negative (limited) assurance
Identifies the applicable financial reporting framework

At Insight Accounting CPA Professional Corporation, all our review engagements strictly adhere to CSRE 2400 standards, ensuring professional quality, regulatory compliance, and meaningful assurance for stakeholders.

Limited Assurance vs. Reasonable Assurance

Understanding the distinction between limited assurance and reasonable assurance helps businesses select the appropriate level of service and helps users interpret the resulting reports.

Limited Assurance (Review Engagement)

Nature:

Based primarily on inquiry and analytical procedures
Focuses on identifying obvious material errors
Provides “negative” assurance (nothing came to attention)
Lower level of confidence than reasonable assurance

Procedures:

Inquiry with management and key personnel
Analytical procedures comparing expected vs. actual results
Review of financial statement preparation processes
Limited testing of details

Cost and Time:

Moderate cost (typically 40-60% of audit cost)
Shorter timeframe (2-4 weeks typical)
Less disruption to business operations

Best For:

Lender requirements for moderate-sized loans
Stakeholder reporting for private companies
Regulatory compliance where review is acceptable
Businesses seeking cost-effective assurance

Reasonable Assurance (Audit Engagement)

Nature:

Based on extensive testing and verification procedures
Provides “positive” assurance (opinion that statements are fairly presented)
High level of confidence based on substantial evidence
Highest level of assurance available

Procedures:

Detailed testing of transactions and balances
Verification with external parties
Examination of supporting documentation
Evaluation of internal controls
Substantive procedures

Cost and Time:

Higher cost (typically 2-3x review engagement cost)
Longer timeframe (4-8+ weeks typical)
More extensive business disruption

Best For:

Public companies (required by law)
Large financing transactions
Regulatory requirements mandating audits
Situations requiring highest confidence level

Comparison Summary:

When Do Businesses Need Review Engagements?

Review engagements serve critical business purposes across Mississauga, Brampton, Toronto, and surrounding areas. Understanding when a review engagement is appropriate—or required—helps businesses meet stakeholder needs while managing costs effectively.

Common Scenarios Requiring Review Engagements:

1. Lender Requirements
Many financial institutions require reviewed financial statements for:

Commercial loans above $250,000
Operating lines of credit over certain thresholds
Commercial mortgages and real estate financing
Equipment financing for substantial purchases
Loan covenant compliance reporting

2. Stakeholder Reporting
Private companies often need reviewed financial statements for:

Shareholder reporting: Providing minority shareholders with assurance on financial results
Partnership agreements: Meeting contractual obligations to provide reviewed statements
Investor updates: Reporting to private equity, venture capital, or angel investors
Board of directors: Supplying directors with reliable financial information

3. Regulatory and Compliance Requirements
Certain industries and situations require reviewed financial statements:

Condominium corporations in Ontario

-某些regulated professionals (specific requirements vary)

Franchise disclosure document requirements
Industry-specific regulatory filings

4. Sale or Acquisition of Business
Reviewed financial statements are valuable for:

Vendor due diligence: Providing potential buyers with reliable financial information
Purchase price negotiations: Supporting valuation discussions
Earn-out calculations: Providing agreed-upon basis for post-sale calculations
Financing acquisitions: Supporting buyer’s financing applications

5. Transition to Audit
Growing businesses may use review engagements as a stepping stone:

Preparing systems and processes for future audits
Building stakeholder confidence before audit requirements
Managing costs while scaling operations

Industries Needing Review Engagements

Certain industries in the Greater Toronto Area have specific needs that make review engagements particularly valuable. Our experience spans multiple sectors, including:

Construction and Contracting

Why Reviews Are Needed:

Bonding requirements: Surety companies often require reviewed or audited financial statements for performance bonds and bid bonds
Project financing: Large project financing typically requires assurance on financial capacity
Joint ventures: Partners often require reviewed statements before entering project partnerships
Lender covenants: Construction financing frequently includes review engagement requirements

Our Expertise:
Understanding percentage-of-completion accounting, work-in-progress schedules, and construction-specific financial reporting challenges.

Healthcare and Medical Practices

Why Reviews Are Needed:

Practice acquisitions: Buyers require reliable financial information when purchasing medical practices
Partnership buy-ins: New partners typically require reviewed financial statements
Financing expansion: Equipment purchases and facility expansion often require reviewed statements
Regulatory compliance: Certain healthcare entities have specific reporting requirements

Our Expertise:
Understanding healthcare billing, OHIP reconciliation, professional corporation structures, and medical practice valuation.

Non-Profit Organizations

Why Reviews Are Needed:

Funding requirements: Grantors and donors often require reviewed financial statements
Board governance: Boards of directors need assurance on financial stewardship
Membership organizations: Large member-based organizations benefit from external assurance
Transition to audit: Growing nonprofits preparing for audit requirements

Our Expertise:
Understanding restricted funds, charitable registration requirements, and NPO-specific accounting standards.

Franchises

Why Reviews Are Needed:

Franchisor requirements: Franchise agreements often mandate annual review engagements
Franchise disclosure: Franchisors must include financial information in disclosure documents
Expansion financing: Multi-unit franchisees need assurance for growth financing
Territory acquisition: Purchase of additional franchise territories requires financial capacity demonstration

Our Expertise:
Understanding franchise agreements, royalty structures, and franchisor financial reporting requirements.

Manufacturing and Distribution

Why Reviews Are Needed:

Supplier financing: Large suppliers may require reviewed statements for credit terms
Asset-based lending: Inventory and receivables financing typically requires review
Investment in technology: Capital equipment financing requires financial assurance
Export financing: Government export programs often require reviewed financial statements

Our Expertise:
Understanding inventory valuation, cost accounting, and manufacturing margin analysis.

Real Estate and Property Management

Why Reviews Are Needed:

Mortgage financing: Lenders require assurance on cash flow and property values
Investor reporting: Real estate investment partnerships require regular financial reporting
Property acquisitions: Purchase financing requires reviewed financial statements
Condominium management: Ontario condominium corporations have specific requirements

Our Expertise:
Understanding property valuation, lease accounting, and real estate investment structures.

Analytical Procedures in Review Engagements

Analytical procedures are the cornerstone of review engagements. These procedures involve evaluating financial information by studying plausible relationships among both financial and non-financial data.

Types of Analytical Procedures:

1. Trend Analysis
Comparing current year results to prior periods:

Revenue growth trends
Expense ratio changes
Gross margin fluctuations
Working capital patterns

2. Ratio Analysis
Evaluating key financial ratios for reasonableness:

Liquidity ratios (current ratio, quick ratio)
Profitability ratios (gross margin, net margin, ROE)
Efficiency ratios (inventory turnover, receivables turnover)
Leverage ratios (debt-to-equity, interest coverage)

3. Industry Comparison
Benchmarking against industry norms:

Industry-average ratios
Comparable company analysis
Market data comparison
Economic indicator correlation

4. Expectation Development
Creating expectations based on:

Historical trends
Budget and forecast comparisons
Economic conditions
Known business changes

5. Relationship Analysis
Examining relationships between accounts:

Revenue to accounts receivable
Cost of sales to inventory
Payroll to headcount
Interest expense to debt levels

Identifying Unusual Items:

When analytical procedures identify unexpected relationships or fluctuations, the CPA must:

Inquire of management about the causes
Obtain corroborating evidence
Evaluate whether the explanations are reasonable
Consider whether material misstatements may exist

Limitations:

While powerful, analytical procedures have limitations:

They may not detect fraud or illegal acts
They provide less evidence than direct testing
Effectiveness depends on data reliability
Small misstatements may not be identified

Review vs Compilation vs Audit: Comparison Table

Selecting the right level of service is crucial. This comparison helps Mississauga businesses understand their options.

Decision Framework:

Choose Compilation When:

No external assurance is required
Financing needs are modest
Budget is limited
Primary use is internal management or tax preparation

Choose Review When:

Lenders or stakeholders require limited assurance
You need cost-effective external validation
Business is growing but not yet audit-required
You want to build confidence with investors or partners

Choose Audit When:

Required by law or regulation
Significant financing is at stake
Public accountability is required
Highest level of assurance is necessary

AI-Enhanced Review Process: Accounting Intelligence

At Insight Accounting CPA Professional Corporation, we’ve transformed the traditional review engagement through our proprietary Accounting Intelligence system. This AI-enhanced approach combines advanced technology with professional CPA expertise to deliver more thorough, efficient, and insightful review engagements.

How Accounting Intelligence Enhances Review Engagements:

1. Advanced Analytical Procedures
Our AI systems perform sophisticated analysis including:

Multi-dimensional trend analysis across multiple periods
Automated ratio analysis with industry benchmarking
Detection of unusual patterns and relationships
Correlation analysis between financial and operational data
Predictive analytics for expectation development

2. Intelligent Inquiry Preparation
The system generates targeted inquiry points based on:

Identified unusual transactions or trends
Industry-specific risk factors
Historical patterns and anomalies
Data quality assessments

3. Enhanced Risk Assessment
AI-assisted risk identification:

Automated identification of high-risk areas
Pattern recognition for potential misstatements
Fraud risk indicator analysis
Internal control weakness identification

4. Real-Time Collaboration
Our secure client portal enables:

Real-time document sharing and review
Secure messaging with engagement team
Progress tracking and deadline management
Transparent communication throughout the engagement

5. Quality Assurance
Multi-layered quality control:

AI performs initial data analysis and error detection
Senior CPAs review AI-generated insights
Experienced professionals conduct inquiry and analysis
Final partner review before report issuance

Benefits of Our AI-Enhanced Approach:

Our Commitment:

While Accounting Intelligence enhances efficiency and depth of analysis, every review engagement is led by experienced CPAs who:

Apply professional judgment and skepticism
Conduct meaningful inquiry with management
Exercise independent professional judgment
Ensure full compliance with CSRE 2400
Provide personalized service and insights

CPA Independence Requirements for Review Engagements

Independence is a fundamental requirement for review engagements. Understanding these requirements helps businesses ensure their engagement can proceed without conflicts.

What Is Independence?

Independence means the CPA is free from relationships, interests, or circumstances that could compromise professional judgment or objectivity. It comprises:

1. Independence of Mind (Mental Independence)

The state of mind that permits the provision of an opinion without being affected by influences
Professional skepticism and objectivity
Freedom from conflicts of interest

2. Independence in Appearance (Observable Independence)

The avoidance of facts and circumstances that would cause a reasonable and informed third party to conclude integrity, objectivity, or professional skepticism has been compromised
No financial interests or relationships that could appear to impair judgment

Financial Interests That Impair Independence:

Direct financial interests: Owning shares or debt instruments of the client
Indirect material financial interests: Significant investments through mutual funds or retirement accounts
Loans to or from the client: Financial borrowing or lending relationships
Guarantees: Guaranteeing client’s debt or having debt guaranteed by the client

Business Relationships That Impair Independence:

Board membership: Serving as director or officer of the client
Management role: Participating in management decisions or operations
Joint ventures: Business ventures with the client
Significant commercial relationships: Major supplier or customer relationships

Family and Personal Relationships:

Immediate family members: Spouses and dependents who work for or have financial interests in the client
Close family members: Parents, siblings, and non-dependent children in key positions
Personal relationships: Close personal friendships that could affect objectivity

Maintaining Independence:

At Insight Accounting CPA Professional Corporation, we maintain independence through:

Annual independence confirmations
Prohibited relationship policies
Engagement acceptance procedures
Ongoing monitoring and training
Immediate disclosure of potential conflicts

AI-Enhanced Review Engagement Procedures

At Insight Accounting CPA Professional Corporation, we’ve elevated the traditional review engagement through our proprietary Accounting Intelligence platform. By combining AI-enhanced analytical capabilities with professional CPA judgment, we deliver review engagements that provide meaningful limited assurance with greater depth of analysis and efficiency than conventional approaches.

Automated Analytical Procedures Comparing Periods

Analytical procedures form the foundation of any review engagement under CSRE 2400. Our AI systems perform sophisticated multi-period comparisons that go far beyond simple year-over-year variance analysis. The platform examines trends across multiple dimensions—monthly patterns, seasonal fluctuations, and cross-account relationships—to identify anomalies that warrant inquiry. For Mississauga businesses with complex operations, this automated analysis provides comprehensive coverage of account balances and transactions, ensuring unusual fluctuations are identified and investigated appropriately.

AI-Driven Inquiry Suggestion Engine Based on Variance Detection

When analytical procedures identify unexpected variances or relationships, the CPA must inquire of management to understand the causes. Our AI platform takes this a step further by generating targeted inquiry suggestions based on the specific nature of identified variances. The system draws on industry knowledge, historical engagement data, and risk indicators to suggest precise questions that will elicit the information needed to assess whether explanations are reasonable. This intelligent inquiry preparation ensures thorough investigation of all significant fluctuations while maintaining the efficiency that makes review engagements cost-effective.

Real-Time CSRE 2400 Compliance Tracking

Compliance with Canadian Standards on Review Engagements (CSRE 2400) requires meticulous documentation of procedures performed, inquiries made, and conclusions reached. Our real-time compliance tracking system monitors engagement progress against professional standards requirements, ensuring all mandatory procedures are completed and adequately documented. Engagement teams receive alerts for outstanding items, and partners can review workpaper completeness through comprehensive dashboards. This systematic approach reduces the risk of non-compliance and streamlines the quality control review process.

Automated Limited Assurance Documentation

Review engagement documentation must support the limited assurance conclusion expressed in the review engagement report. Our AI systems automatically generate comprehensive documentation of analytical procedures performed, including the expectations developed, the results of comparisons, and the disposition of identified variances. The platform maintains complete records of management inquiries, responses received, and any corroborating evidence obtained. This automated documentation ensures that every significant matter is properly recorded and supports the negative assurance conclusion.

Intelligent Ratio Analysis and Trend Identification

Financial ratios provide critical context for assessing the plausibility of financial statements. Our AI platform calculates and analyzes dozens of financial ratios—liquidity, profitability, efficiency, and leverage metrics—comparing them against industry benchmarks, historical trends, and reasonable expectations. The system identifies ratio relationships that appear unusual or inconsistent with other financial data, flagging these for additional inquiry. For GTA businesses in specialized industries, this intelligent ratio analysis provides valuable insights that enhance the meaningfulness of our limited assurance conclusion.

Interested in AI-enhanced review engagements? Explore our AI & Automation services or contact us to learn how our intelligent review procedures can provide greater confidence in your financial reporting.

Frequently Asked Questions About Review Engagements

What is the difference between a review and an audit?

A review provides limited assurance through inquiry and analytical procedures. The CPA states that nothing has come to their attention indicating material misstatements. An audit provides reasonable assurance through extensive testing and verification, with the CPA expressing a positive opinion that statements are fairly presented. Reviews are less comprehensive but significantly more cost-effective than audits.

Is a review engagement the same as an audit “lite”?

No. A review is not simply a reduced-scope audit—it’s a fundamentally different type of engagement with different procedures, standards, and assurance levels. Reviews focus on inquiry and analytical procedures rather than detailed testing. While reviews provide meaningful assurance, they do not provide the same level of confidence as audits.

How much does a review engagement cost?

Review engagement costs typically range from $4,000 to $15,000+, depending on:

Business size and complexity
Condition of accounting records
Industry-specific requirements
Timing and urgency
Additional services required

Our Accounting Intelligence systems help provide efficient, competitive pricing while maintaining quality.

How long does a review engagement take?

Most review engagements are completed within 2 to 4 weeks, depending on:

The complexity of your business
Timeliness of document provision
Our current engagement schedule
Inquiries and follow-up required

We can accommodate urgent requests when necessary.

Will my bank accept reviewed financial statements?

Most banks and lenders accept reviewed financial statements for commercial loans, lines of credit, and commercial mortgages. Reviewed statements are generally accepted for moderate-sized financing needs (typically loans up to $1-5 million, depending on the lender). Larger financing may require audited statements.

Can you review financial statements prepared by another accountant?

Yes, we can perform review engagements on financial statements whether they were prepared by your internal team, another accountant, or by us. However, we must ensure our independence and perform all required CSRE 2400 procedures regardless of who prepared the initial financial statements.

Do I need a review every year?

The frequency depends on your needs:

Lender requirements: Typically annual, as specified in loan agreements
Shareholder agreements: Usually annual, per contractual terms
Regulatory requirements: As specified by applicable regulations
Business decisions: May be annual or periodic based on business needs

Many businesses arrange standing annual review engagements to ensure compliance and timely reporting.

Contact Insight Accounting CPA Professional Corporation

Ready to discuss your review engagement needs? Contact Insight Accounting CPA Professional Corporation today for a consultation.

Insight Accounting CPA Professional Corporation
Bader A. Chowdry, CPA, CA, LPA — AI Inventor & AI Specialist
4300 Village Centre Ct Unit 100
Mississauga, ON L4Z 1S2

📞 (905) 270-1873
📧 info@insightscpa.ca

Service Areas:

We proudly serve businesses in Mississauga, Brampton, Toronto, Oakville, Burlington, and throughout the Greater Toronto Area (GTA), Peel Region, and Halton Region.