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What is the difference between an examination and an audit?

An examination is similar to an audit, but the main difference is that an audit focuses on historical financial information while an examination focuses on non-historical financial information. In addition, an audit is subject to PCAOB audit standards (public companies) or Statement on Auditing Standards (private companies).

An examination is subject to Standards of Standards for Attestation Engagements (SSAE). For both an examination and audit, independence is required, and the CPA would express positive assurance (meaning the financial information is free from material misstatement).


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  • What is an examination engagement?

    An examination is similar to an audit since “positive assurance” is expressed by the CPA or practitioner. That means that the level of procedures performed will be very similar to the level performed for an audit. Remember, when the CPA expresses positive assurance, they are basically saying “We have reasonable assurance that the financial statements...

  • What is limited assurance?

    Limited assurance is sometimes referred to as negative assurance. When limited assurance is provided, the CPA is basically saying that based on their work, they are “not aware” of any material misstatements. This is different from positive assurance, because under positive assurance, the CPA would say they have reasonable assurance that the financials are free...