FINANCIAL STATEMENT SERVICES
Our firm provides two basic levels of financial statement attest services: Compilations and Reviews, discussed below.
Compilations – lower level attest service
A CPA firm issuing a Compilation Report containing an organization’s financial statements provides no assurance on the financial statements. Organization’s Management provides financial data to the CPA firm. The CPA rearranges it obtains from Management in a financial statement format that complies with generally accepted accounting principles. A CPA performs no testing or analytical procedures during a Compilation engagement.
An entity may choose Financial Statement Compilation services if neither the firm, its creditors, nor other relevant outside parties require any level of assurance as to the accuracy of the financial statements.
Reviews – medium level attest service
A review provides limited assurance on an organization’s financial statements. It is important to keep in mind that during a review, a CPA does not confirm balances with banks or creditors. It does not test selected transactions by examining supporting documents. Instead, the CPA performs inquiries and analytical procedures. These procedures provide a reasonable basis for expressing limited assurance that no material modifications to the financial statements are necessary in order that the financial statements are in conformity with generally accepted accounting principles.
In an review, the CPA must be independent of the client. The financial statements must contain all footnotes required by generally accepted accounting principles. In many instances, a review—with its limited assurance —may be adequate for a business or its creditors. This type of limited analysis is useful when the organization needs some assurance about their financial statements, but not the higher level of assurance provided by an audit.