Stockholders, creditors, and private investors often need assurance that the
financial statements accurately represent the true financial position of a company.
Your stockholders, creditors, or private investors have different levels of risk tolerance, so we provide
varying levels of assurance to meet your needs.
Management Use Only
These financial statements are intended solely for the information and use of management and are not intended to be and should not be used by any other party. These statements provide management with timely accounting information which they can use to make informed business decisions at a reasonable cost.
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.
Review
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.
Which Report Should You Use?
Each type of financial statement report may suit specific circumstances, depending on requirements from your
client's bank or other parties, as well as meet 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.
