Financial Reporting

Financial Statement Review

Less extensive than an audit, but more involved than a compilation, a review engagement consists primarily of analytical procedures that we apply to the financial statements, and various inquiries we will make of your company’s management team. If the financial statements or supporting information appear inconsistent or otherwise questionable, we may need to perform additional procedures.

A review doesn’t require us to study and evaluate your company’s internal controls, verify data with third parties, or physically inspect assets. Rather, a review report expresses limited assurance in the form of the statement: “We are not aware of any material modifications” for the financial statements to be in conformity with Generally Accepted Accounting Principles (GAAP). Reviewed financial statements must include all required footnotes and other disclosures.

Why might a business request a review engagement? It can be a good middle ground, providing the advantages of a CPA’s technical expertise without the work and expense of an audit.

Financial Statement Compilation

In compiling financial statements for a client, we present information that is the “representation of management” and expresses no opinion or assurance on the statements. Compilations don’t require inquiries of management or analytical procedures. Instead, we rely on our knowledge of accounting principles and a general understanding of your business.

Banks often require compilations from an independent CPA as part of their lending covenants.

Which report should you use?

Each type of financial statement report may suit specific circumstances, depending on requirements from your bank or other parties, as well as meeting budgetary needs.

Understanding each report’s unique strengths and weaknesses can help you choose the most appropriate one. Contact us to discuss your needs and we will advise you in choosing the right option.