Here is a visual picture that illustrates the different comfort levels someone can draw from financial statements that have been audited, reviewed, or compiled by a CPA.
Here is a picture of assurance levels from reports issues by CPAs.
We CPAs use the word ‘assurance’ when we talk about this concept. This means how much can a reader of the financial statements rely on the accountant’s report and the accompanying financial statements based on the level of assurance that the accountant has gained for himself or herself.
The concept for the picture above is from the 2010 AICPA NAATS conference. The concept was relayed by a presenter at the Inland Empire chapter of the California Society of CPAs. I don’t know who made the original presentation. If I find out, I shall provide appropriate credit. I have modified the concept in several ways based no my years experience working in the audit profession.
This issue is discussed further in the following post.