Voluntary Audit or Independent Review: What’s Best for Your Business?

We have previously discussed mandatory audits, looking at the businesses that are legally required to undergo them. Once you have confirmed that it does not apply to you, you are left with an important choice: Should you still pursue a voluntary audit or perhaps an independent review? Both are pathways to financial oversight and credibility, but understanding the differences will help you make the right call for your business.  

We will now explore what each option entails, their key differences, and when one might be a better fit than the other.

‍

What is a voluntary audit?

A voluntary audit is initiated by the business itself or its stakeholders, even though it is not legally required. As with a mandatory audit, it must be conducted by a registered auditor who issues an official opinion on the fairness and accuracy of your financial statements.

‍

What is an independent review?

An independent review is also done voluntarily, but is less intensive and more cost-effective than an audit. It involves a registered accountant (not necessarily a registered auditor) performing limited procedures to assess whether your financial statements are credible and reasonably prepared, with a focus on plausibility rather than detailed verification. Independent reviews are suitable for companies with lower public interest and less complex operations.

‍

Voluntary audit vs. independent review: Key differences

To help understand how the two types of financial checks are distinct from one another, let’s compare their essential features.  

‍

Making the choice: Voluntary audit, independent review, or neither

Your unique business situation should determine which vehicle for financial scrutiny is needed – if any at all.  

Choose a voluntary audit if:  

• You plan to raise capital or apply for funding and must demonstrate strong governance and transparency.
• You want to strengthen investor or stakeholder confidence.
• Your shareholders require it.
• You suspect internal controls need strengthening, and you want to identify weaknesses early.
• You want a deeper, more detailed view of your finances.

An independent review may be your best fit if:  

• Your Public Interest Score (PIS) is low (under 100).
• Your business is small to medium-sized with simple operations.
• You are confident in your internal controls and financial reporting.
• You want a cost-effective compliance option that still offers assurance.

Although a voluntary audit or independent review could always offer valuable insights, you could choose not to do either if your company:

• Has a PIS below 100
• Is a private company with no fiduciary obligations
• Has no external or internal pressure to produce verified financial statements
• Your MOI does not require it
• And your company's shareholders and directors are exactly the same natural persons (requirement)

‍

Not sure which option to choose?

At Huysamen Westraad Inc., we recognise that every business has distinct needs, and we are committed to helping you evaluate your goals, compliance requirements, and budget.

Let’s start with a discussion about your current operations, your strategic plans, and any stakeholder expectations. From there, we can recommend the assurance service that brings you the most value – not just a compliance checkbox.

Book a consultation with our expert team today, and we will chart the best course forward for your business.