Our Financial Statement Services
Businesses request our accounting reports for many different reasons, including to show investors, lenders, suppliers, and customers. These financial statements each serve a distinct purpose and come in three basic forms: audit, review and compilation. Choosing the right financial service for you requires identifying your specific needs and the purpose of such a report.
Accounting Audits
When a business owner needs to provide financial statements to lenders or investors, they generally need a CPA audit. As auditors must obtain reasonable assurance of the accuracy of these reports, audits generally relay more confidence than reviews or compilations.
When our CPAs conduct audits, they undertake the following tasks with expert precision:
- Assess the organization’s operations, financial reporting, and known fraud or error
- Evaluate internal controls
- Analyze inconsistencies and variances in account balances
- Observe physical inventory count
- Confirm accounts with third parties
After this is complete, we issue what’s called a “qualified opinion” or “unqualified opinion” on the company’s financial statements. We make this call in accordance with the Generally Accepted Accounting Principles (GAAP).
Accounting Reviews
A review goes into less depth than an audit, so it provides less assurance to its recipient. Although the CPA conducting the review doesn’t conduct many of the procedures they would during an audit, they do assess the following:
- The company’s accounting practices and principles
- How the company records financial information
- Actions taken at owners’ meetings
- Receipts of relevant information
- Management’s fraud detection measures and internal controls
- Expectations, ratios, and plausible relationships of recorded amounts
Our accounting reviews provide clarity on the relationship between certain numbers and give more assurance about a business’ financial condition than financial statements would. Because a review is less in-depth than an audit, the CPA does not express an official opinion.
Accounting Compilations
In contrast to an audit, accounting compilations generally serve to assist management. A compilation involves two primary tasks:
- Getting a basic idea of a business’ accounting principles and reporting system
- Presenting financial information in the accepted format
Because compilations are so limited in scope, the CPA’s report doesn’t express an opinion or provide assurance regarding financial statements.
As a business owner, requesting expertly prepared financial reports from time to time is just doing your due diligence. Reports encourage confidence from would-be partners, investors, and suppliers, and they offer an invaluable management tool. Additionally, they can serve as a checkup for your company, helping you catch issues before they become problems.