Financial Statements

As a business owner, your creditors and your business partners often need assurance that the financial statements accurately represent the true financial position of your Company.  We provide three levels of assurance to meet your needs.

Financial Statement Preparation—No Assurance

The objective of a Financial Statement Preparation engagement is to prepare financial statements in accordance with the applicable financial reporting framework.  These financial statements comply with the general principles set forth in the AICPA’s literature which includes compliance with certain conditions.

Financial Statement Preparation does not apply when financial statements are prepared to be:

  • Submitted solely to taxing authorities
  • Included in written personal financial plans that the accountant has prepared
  • Used in conjunction with litigation services involving legal or regulatory proceedings either pending or potential, or
  • Used in connection with business valuation services. 

Financial statements prepared under this level must have a legend on each statement stating “No Assurance is Provided on these Financial Statements.”

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.

Which Report Should You Use?

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

Understanding each report's unique strengths and weaknesses can help you choose the most appropriate one. Please call and let us work with you to determine the right type of report for you.

Review - Limited Assurance

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.

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.

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