Not every company will need an audited financial statement. Some stakeholders are content with a reviewed financial statement or perhaps even a financial statement compilation. What are the differences?
Reviewed Financial Statement
A reviewed financial statement provides limited assurance that the financial statements are in accordance with generally accepted accounting principles. Review procedures, which consist primarily of inquiry and analytical procedures, are less extensive than an audit. During a review, here’s what you can expect from our experienced accounting professionals who will work with you to understand your business:
- Assistance in drafting of your financial statements
- Analysis of your financial statements including benchmarking you against yourself and similar companies
- An analysis of your key ratios, particularly as they relate to your credit covenants
- Analysis of your key contractual agreements
- Brainstorming ideas of what we see from “Best-in-Class” companies
Compiled Financial Statement
Some stakeholders may be satisfied with a compiled financial statement. A compilation includes the proper presentation of management’s information without expressing any assurance on the financial statements. Thus, a compilation is less extensive than a review. A compilation entails reading the financial statements to ensure whether they appear appropriate in form and are free from obvious material misstatements. Given the limited scope of a compiled financial statement, the CPA expresses no assurance on the financial statements.