The Difference Between a Review and an Audit: Which Is Right for Your Business in Nigeria?

As more Nigerian businesses pursue growth, funding, and partnerships, financial reporting is becoming more critical. But when it comes to professional assurance services, many business owners get confused between a financial audit and a financial review.

So, what’s the difference—and which one should your business go for?

Feature	Financial Review	Financial Audit
Level of Assurance	Limited assurance	Reasonable (high) assurance
Scope	Analytical procedures and inquiries	In-depth testing and verification
Cost	Lower	Higher
Time Required	Shorter	Longer
Common Users	SMEs, internal stakeholders	Investors, regulators, banks

What Is a Financial Review?

A review is a less intensive examination of your financial statements. The accountant uses analytical procedures and inquiries to determine if the financials appear reasonable.

Ideal for:

• Small and medium-sized businesses (SMEs)

• Companies preparing for their first audit

• Internal reporting or board reviews

• Businesses not required by law to conduct a full audit

Example:

A logistics company in Port Harcourt may choose a review to present summarized, credible reports to attract a local investor, without incurring the cost of a full audit.

What Is a Financial Audit?

An audit offers a deeper level of assurance. Auditors don’t just inquire—they inspect, verify, and test transactions and systems. It’s comprehensive, and it carries more weight with regulators, banks, and external stakeholders.

Required for:

• Public limited companies (PLCs)

• Companies with annual turnover exceeding ₦25 million (as per CAC/FIRS guidelines)

• NGOs receiving donor funding

• Businesses applying for large loans or government contracts

Example:

A real estate development company in Abuja bidding for a government contract will likely need audited financials as part of the eligibility requirements.

So, Which One Should You Choose?

Ask yourself:

• Is your business legally required to perform an audit?

• Are you preparing for fundraising or investment?

• Do your stakeholders demand a high level of financial assurance?

• Can you afford the time and cost involved in a full audit?

If your answer to most is yes, then an audit is the right move. If not, a review might be a cost-effective alternative.

Key Takeaways for Nigerian Businesses

• Don’t assume one size fits all—your business size, structure, and goals should guide your decision.

• A review may suffice for internal reporting or early-stage growth.

• An audit provides credibility and opens doors to serious funding and contracts.

• Always consult a professional accountant or auditor who understands Nigerian compliance standards.

Whether you need a review or an audit, partnering with a reliable accounting firm ensures you're on the right path. If you’d like to discuss your business needs, our team is here to help you make the smart choice.