Levels of service
Costin and Kendall CPAs will prepare your financial statements in accordance with an accounting framework that is appropriate for your business. Stockholders, creditors, and private investors often need financial statements to represent the financial position of a company. Bank representatives often request financials in relation to a loan package. Accurate and understandable financial statements are necessary to gauge how well your business has performed and to assess the strength of its financial position.
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.
Why might a business request a review engagement? It can be a good service level, providing the advantages of a CPA's technical expertise without the work and expense of an audit.
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.
Financial Statement Preparation
The basic financial statements are prepared in accordance with an acceptable finacial reporting framework. Typically, this service is performed monthly, quarterly or annually.
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.