Many U.S. private firms choose either a financial statement compilation or review rather than the higher assurance provided by an audit, yet little is known about these choices. We explore economic aspects of private firm choice of less-than-audit levels of assurance applied to GAAP-based financial statements. We find that CPA fees more than double for each increment in assurance. Commonly used financial reporting quality proxies are higher for both reviews and audits relative to compilations but are statistically indistinguishable on average between reviews and audits. Cost of debt is significantly lower for reviews than for compilations and significantly lower for audits than for reviews. Finally, we find that assurance level choices are associated with bank debt, trade credit, and potential internal information reliability and control concerns.

许多美国私营公司选择财务报表编制或审查，而不是审计提供的更高保证，但人们对这些选择知之甚少。我们探讨了私营公司选择低于审计水平的保证应用于基于 GAAP 的财务报表的经济方面。我们发现，每增加一次保证，注册会计师的费用就会增加一倍以上。与汇编相比，审查和审计中常用的财务报告质量指标更高，但平均而言，审查和审计之间在统计上无法区分。审查的债务成本明显低于汇编，审计的债务成本明显低于审查。最后，我们发现保证级别的选择与银行债务、贸易信贷以及潜在的内部信息可靠性和控制问题有关。