Lamin’s bank asked for “assurance on his financials.” He assumed that meant a full audit, but it didn’t have to.
Two options exist here, and businesses often default to the more expensive one without realizing there’s a lighter alternative available.
The Two Options
A financial review checks your statements for obvious inconsistencies and offers limited assurance rather than a deep investigation. It’s faster, less expensive, and often enough for smaller loans or internal use.
A full audit is an independent, in-depth test of your transactions and controls. It’s the highest level of assurance available, and it’s usually required for larger loans, grants, or regulatory filings. It also takes longer and costs more.
How to Know Which One You Need
- Ask what the bank, funder, or regulator specifically requires
- Check whether a review would satisfy that requirement before committing to a full audit
- Consider your size — a five-person shop rarely needs the same scrutiny as a fifty-person company
Guessing wrong costs money either way. You either pay for an audit you didn’t need, or you get a review rejected because it wasn’t enough.
What Actually Drives the Decision
It’s rarely about what you’d prefer. Lenders, grant bodies, and regulators each have their own thresholds, and those thresholds usually depend on the size of the request, not the size of your business. A modest working capital loan might only need a review. A larger facility, or funding tied to government or donor money, almost always calls for a full audit, no matter how small the company is.
Where Owners Get This Wrong Most Often
Some assume a review is simply a “cheaper audit,” so they request one and hope it’s accepted. Others go the opposite direction, paying for a full audit out of caution, when a review would have satisfied the requirement just fine. Both mistakes come from the same root problem: not asking the specific question upfront. A five-minute phone call to whoever’s requesting the assurance usually settles it before any work begins.
Getting this right the first time saves weeks. It also saves you from submitting the wrong document and having to start the process over under a deadline.
Not sure which one fits your situation? JS Morlu helps you figure out exactly what’s required before you commit to either. Talk to our team.