At times, investors, lenders, and stakeholders of a company may request that financial statements are audited, reviewed or compiled by a CPA. When this occurs, what they are really asking for is assurance that the company’s financial statements are accurate. An experienced CPA firm can provide certain assurances through three different levels of service, audits, reviews, and compilations.
An audit provides the highest level of assurance on a company’s financial statements. Its primary goal is to attain a level of "reasonable assurance" regarding the overall accuracy of the company's financial statements in portraying its financial status. An audit serves the purpose of confirming that specific financial statements align with the relevant reporting requirements, U.S. Generally Accepted Accounting Principles (GAAP).
An audit can be useful in many ways for your business, including to:
Our Financial Statement Review services are less extensive than an audit but more detailed than a Compilation. They offer the advantages of our CPAs technical expertise without the more extensive procedures and expense of an audit.
This engagement involves a meticulous evaluation of your company's financial statements through analytical procedures and inquiries directed at your management team. Unlike an Audit, a Review does not delve into an examination of your company's internal controls, third-party data verification, or physical asset inspections. The purpose of a Review is aimed at providing the company with assurance that the CPA firm is not aware of any material modifications required in the financial statements and that they are in conformity with Generally Accepted Accounting Principles. Should any inconsistencies or uncertainties arise in the financial statements or supporting data, we may conduct additional investigative procedures.
Our Compilation services are designed to format financial information in accordance with Generally Accepted Accounting Principles (GAAP). Compilations are a presentation of financial statements organized in a required format that is in accordance with accounting standards. Unlike Reviews or Audits, Compilations do not require us to make inquiries of management or perform analytical procedures.They represent the data provided by management and do not involve expressing an opinion or providing assurance on the financial statements. Instead, we rely on our deep understanding of accounting principles and a general knowledge of your business operations to to assist management in presenting financial data in the form required by generally accepted accounting principles.
