An audit engagement provides the highest level of assurance over financial statements. It is an examination of an organization’s book and records by an independent auditor (for financial statements in Ontario this person needs to be a licensed public accountant) to evaluate whether financial statements are presented fairly in accordance with an accounting framework.

An audit engagement involves an assessment of risks of material misstatement, obtaining an understanding of internal controls relevant to the preparation and fair presentation of the financial statements, evaluating the appropriateness of accounting policies and the reasonableness of accounting estimates and evaluating the overall presentation of the financial statements.