Compilation - Lowest Level of Assurance
In compiling financial statements for a client, we present information that is the "representation
of management" and express 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.
Review - Limited Assurance
Less extensive than an audit, but more involved than a compilation, a review engagement consists primarily of
analytical procedures we apply to the financial statements, and various inquiries we 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 or 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 the 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.
Audits - Highest Level of Assurance
We no longer perform audits for our clients. We believe our focus should be on helping our clients with their ongoing business operations, rather than acting as a watchdog over their financial statement reports. However,should you require an audit, we would be happy to assist you in preparing the initial, compiled financial statements and working with your auditors.
An audit is a very expensive option. We can help keep these costs as low as possible by providing your auditors with the information they seek in a format that is acceptable to them. As former auditors, we speak their language.
Which Service Do You Need?
Each type of financial statement report may suit specific circumstances, depending on requirements from your bank or other parties, as well as in meeting your budgetary needs.
Understanding each report's unique strengths and weaknesses can help you choose the most appropriate one. Please call if you have questions about which type of report is right for you.
