Financial Statement Prepration

Financial statements are often times required by a lending institution or a government agency. We can prepare the following financial statements for you:

• Compilations

• Reviews
   

Compilation:

Preparing financial statements of private entities based on information provided by the entity’s management.

Through compilation services, a CPA prepares monthly, quarterly, or annual financial statements. However, he or she offers no assurance as to whether material, or significant, changes are necessary for the statements to be in conformity with generally accepted accounting principles, the cash basis, or the income tax basis of accounting. During a compilation, the data is simply arranged into conventional financial statement form. No probing is conducted beneath the surface unless the CPA becomes aware that the data provided is in error or is incomplete.

However, before agreeing to perform a compilation, a CPA will take a "common sense" look at the entity to decide whether the client needs other accounting services, such as help in adjusting the accounting records.

A compilation is sufficient for many private companies. However, if a business needs to provide some degree of assurance that its financial statements are reliable, it may be necessary to engage a CPA to perform a review or an audit.


Review:

Inquiry and analytical procedures applied to financial statements of private entities.

A private entity may engage a CPA to perform a review of its financial statements and issue a report that provides limited assurance that material changes to the financial statements are not necessary. With respect to reliability and assurance, a review falls between a compilation, which provides no assurance, and the more extensive assurance of an audit.

Before a review, the CPA may have to compile the financial statements; however, in all cases, the financial statements are management’s statements, not the CPA’s. Management must have a sufficient understanding of the financial statements to assume responsibility for them.

Two other factors differentiate a review from a compilation — the CPA must remain independent of the client during a review, and all appropriate footnotes must be included in the reviewed statements.