Review, Compilation, & Audit

Stockholders, creditors, and private investors often need assurance that the financial statements accurately represent the true financial position of a company. They may have different levels of risk tolerance, so we provide three levels of assurance to meet the various needs: Compilations, Reviews, and Audits.

Compilation - Lowest Level of Assurance

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 - 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.

Audit - Reasonable Assurance

Your organization may be required to have its financial statements audited for your creditors, stockholders, or other affiliated groups. An audit will provide reasonable assurance that the financial statements are free of material misstatement and are in conformity with the Generally Accepted Accounting Principles (GAAP). 

The responsibility of our Certified Public Accountants is to express an opinion, to verify, financial statements through independent testing and evaluation. Our auditors will asses accounting principles, financial records, cash flow, internal controls, policies, and procedures.

Your preparation for an audit is critical to expedite the audit process. Our trained auditors can thoroughly explain to you what is needed for the process, allowing you to be prepared, which in turn will reduce the length of time and interruption of business an audit may cause.

Which Report Should You Use?

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