Financial Statement Reviews & Compilations

Stockholders, creditors, and private investors often need assurance that the financial statements accurately represent the true financial position of a company.

Your stockholders, creditors, or private investors have different levels of risk tolerance, so we provide two levels of assurance to meet your needs.

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 and even propose adjustments to your financial statements.

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.

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. Some lenders may require footnotes and other disclosures, but most often no disclosures are requested.

Which Report Should You Use?

Either 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.

It is important to find the proper balance between the cost of the services and the level of assurance the users of the financial statements require. 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.

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 or complete the form below for a free consultation.

Name
Phone
Email
Best Time To Call
Comments

Get In Touch

Petersen & Mapes, LLP has been serving the tax and accounting needs of Roseville, CA and surrounding areas since 1995. We would be happy to discuss how our services could benefit you and/or your business.

Please fill out this form and let us know how we can be of service.

Thank you for visiting. We look forward to working together!

Petersen & Mapes, LLP

2260 Douglas Blvd., Suite 290
Roseville, CA 95661
T: (916) 782-3400
F: (916) 782-2644
E: info@p-mcpas.com

© 2021

Search  Site Map  Privacy Policy  Disclaimer  Admin Login
Back to top

Get In Touch

Subscribe to our Newsletter