What distinguishes these three?

Compilation: CPA presents management data with no verification or assurance. Review: CPA performs analytics and inquiries, providing limited assurance. Audit: CPA tests transactions and verifies balances, providing reasonable assurance that statements are fairly presented.

Start with who reads the statements.

Only you and your tax preparer? Compilation suffices. Bank for a moderate loan? Ask what they require. Outside investors? Usually, review the minimum. Major acquisition or IPO? Audit. The reader's requirements determine the appropriate service level.

When to exceed requirements

An audit when only a review is required signals confidence. It removes due diligence objections. It accelerates negotiations. For competitive processes or premium valuations, the audit investment may pay for itself through better terms.