What other services are like an audit but are cheaper?


While an audit is the gold standard and the highest level of assurance a CPA can provide, it may not be the right fit for your needs. There are other services that can be tailored to your needs that may be more cost effective:

Financial Statement Review

A review is a service, the objective of which is to obtain limited assurance that there are no material modifications that should be made to the financial statements in order for the statements to be in conformity with the applicable financial reporting framework (such as US generally accepted accounting principles (US GAAP), cash basis, income tax basis, international financial reporting framework (IFRS), etc.).

If an audit is a gold medal, then a review would be a silver medal.

Reviews typically costs between $7,500 and $17,000 depending on the level of complexity. The same things that drive up the cost an audit drive up the cost of reviews. See audit costs drivers here.

Reviews are regulated by the American Institute of Certified Public Accountants’ (AICPA) Statements on Standards for Accounting and Review Services (SSARS).

Agreed Upon Procedures

Agreed upon procedures have the same level of attest as audit; however, the client gets to pick the specific procedures to be performed. Due to the flexibility of agreed upon procedures the fees can range from $1,000 to $50,000+. The price is based on what procedures you would like to have performed.

Example agreed upon procedures are:

  • Due diligence procedures for potential acquisition targets
  • Joint interest billing ‘audits’ (JIB audits are not typically true audits as defined by the AICPA, but ‘audits’ is the common term used in the industry for a common set of procedures within agreed upon procedures)
  • Ballot casting, counting, and winner envelope preparation for events such as the Academy Awards, the Golden Globes, etc.
  • Internal controls walkthroughs and reviews and list of internal control deficiencies or material weaknesses

If an audit is a gold medal, then agreed upon procedures are also a gold medal. In very simple terms, in an audit, the client has control over their own financial statements, but no control over the procedures and the auditor’s opinion of the financial statements. In agreed upon procedures, the client controls the procedures, but has no control over the report.

Agreed upon procedures are regulated by the American Institute of Certified Public Accountants’ (AICPA) Statements on Standards for Attestation Engagements (SSAE).

Compiled Financial Statements

A compilation is a service, the objective of which is to assist management in presenting financial information in the form of financial statements without providing any assurance that there are no material modifications that should be made to the financial statements in order for the statements to be in conformity with the applicable financial reporting framework (such as US generally accepted accounting principles (US GAAP), cash basis, income tax basis, international financial reporting framework (IFRS), etc.).

No assurance is provided by the CPA on a compilation. Since no assurance is provided, and the engagement is just formatting financial statements, compilation fees are one of the cheapest offerings from a CPA firm from $500 – $2,000 for reports without footnotes, or $1,500 – $5,000 for reports with footnotes.

If an audit is a gold medal and a review is a silver medal, a compilation is most similar to an honorable mention.

Compilations are regulated by the American Institute of Certified Public Accountants’ (AICPA) Statements on Standards for Accounting and Review Services (SSARS).

Favorite Pairings

One very cost effective pairing to do instead of an audit, is to have a financial statement review performed plus an agreed upon procedure to tell you if you have any material weakness or deficiencies in internal controls. This pairing gets you a lot of bang for your buck from a CPA firm as you will get the financial statements plus you will get the feedback on the design of your controls. However, it will not give you any feedback on if your controls are in place and operating as designed. This is also a good pairing if you are interested in having an audit next year, but want to ease into the audit process and have a less invasive project your first year and see what problem would come up before you have your audit. If you are able to take the results of your agreed upon procedures and fix your control problems, your audit coming up will go much more smoothly.

Note that your reviewing CPA will not be allowed to assist you in fixing your procedures if you would like them to do the audit or review in the future. However, your CPA can usually provide you referrals for other professionals that can assist in this area. You also can hire your CPA to fix your procedures, however, that CPA will be precluded from doing your audit or review in the future. This is due to the independence rules CPAs must follow.