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Reviews & Compilations

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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. 

Review 

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.

  • Intended to provide lenders and other outside parties with a basic level of assurance on the accuracy of financial statements.
  • Typically appropriate as a business grows and is seeking larger and more complex levels of financing and credit.
  • CPA issues a review report.

Compilation

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.

  • Intended for use by lenders and other outside parties who may appreciate the business's association with a CPA wthout requiring a level of assurance on the accuracy of financial statements.
  • Typically appropriate when initial or lower amounts of financing or credit are sought or significant collateral is in place.
  • CPA issues formal compilation report.

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.

  • Intended for business owner's use to manage the business (similar to what an in-house controller or CFO would provide for management in a larger company).
  • May fulfill some lenders' documentation requirements for small loans.
  • No formal report issued on the financial statements.

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 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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