Our firm provides review and compilation services. There are three levels of financial statements that a CPA can issue; an audit, a review, and a compilation. Please let us explain, in basic terms what each level of statement represents.

Audit - Highest Level of Assurance

An audit provides the highest level of assurance. An audit is a methodical review and objective examination of the financial statements, including the verification of specific information as determined by the auditor or as established by general practice.

All public companies are required to have an annual audit, but some nonpublic entities must undergo an annual audit as well. These include for profit businesses, not-for-profit agencies and other organizations receiving government grants. Additionally, some financial institutions require audits of nonpublic companies based on the financing amount.

Review - Limited Assurance

Less extensive than an audit, but more involved than a compilation, a review engagement consists primarily of analytical procedures we applied to the financial information, and various inquiries the company's management team. 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.

Compilation - Lowest Level of Assurance

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.