Financial STATEMENT SERVICES
Compilation – Lowest Level of Assurance
Many companies provide their financial statements, along with a CPA’s report, to lenders, investors, suppliers and customers. Informed readers of the report will gain a level of comfort based upon the type of financial statement provided. Not all the reports are the same. Our CPA firm can provide different levels of service related to a company’s financial statements.
The three general levels of financial statement services are audit, review and compilation.
An audit is the highest level of financial service we as a CPA firm can provide. The purpose of having an audit is to provide financial statements users with an opinion by the auditor on whether the financial statements are prepared in accordance with generally accepted accounting principles. An audit enhances the degree of confidence that the intended users can place in the financial statements.
A review engagement is conducted to provide limited assurance that there are no material modifications that should be made to the financial statements for them to be in conformity with generally accepted accounting principles. A review differs significantly from an audit. Review engagements provide less assurance to the reader of the financial statements because the CPA does not perform audit procedures.
In a compilation engagement, the objective is to assist management in presenting financial information in the form of financial statements without the undertaking to provide any assurance that there are no material modifications that should be made to the financial statements so they will conform to generally accepted accounting principles. Because of the even more limited scope of compilation procedures, the CPA’s report will not express an opinion or provide any assurance regarding the financial statements.