Reviews and Compilations

Financial Statement Review & Compilation Services

There are three types of financial statement services: audits, reviews, and compilations.  To learn about our audit services—the most rigorous of the three—click here.

Financial Statement Reviews

The second highest level of financial statement services a CPA can provide is a review. Unlike an audit (where the CPA digs through accounting records and studies transaction documentation), a review uses only basic analytical procedures to double-check that financial statements make sense. The purpose of a review is to simply make sure there are no material departures from Generally Accepted Accounting Principles (GAAP). Because of this, a CPA can express only limited assurance on an organization’s financial statements.

When are reviews necessary?

Reviews are performed when the organization in question needs some level of assurance on their financial statements, but aren’t required to provide the high level of assurance a full-blown audit would provide. For example:

  • Reviews are common requests from lenders when businesses are applying for loans
  • They can be a helpful tool if you’re trying to woo new investors, or
  • If you’re looking for a buyer for your business

Financial Statement Compilations

The most basic financial statement service is the compilation. During a compilation, we compile the financial statements of a client from accounting records provided by the client. And unlike reviews, there are no testing or analytical procedures performed. This being said, the CPA will assist you in preparing financial statements that comply with GAAP, but will not provide an opinion on the statements quality or accuracy. Because of the even more limited scope, a compilation provides no assurance on an organization’s financial statements.

When are compilations necessary?

Unsurprisingly, compilations are best suited for simple accounting situations. For example:

  • For a loan application (given that your company is small and your transactions are straightforward)
  • For a report to existing owners, investors and/or directors
  • To obtain a new business insurance policy