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Stockholders and creditors often need assurance that the financial statements accurately reflect the true financial position of a company.

We provide three levels of assurance to meet your needs.

An audit provides the highest level of assurance.  An audit is a methodical review and objective examination of the financial statements, including verification of specific information as determined by the auditor or as established by general practice.

Our work includes a review of internal controls, testing of selected transactions, and communication with third parties.  Based on our findings, we issue a report on whether the financial statements are fairly stated.

Less extensive than an audit, but more involved than a compilation, 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 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 Generally Accepted Accounting Principles (GAAP).  Reviewed financial statements must include all required footnotes and other disclosures.

Reviewed financial statements are often sufficient to satisfy requirements of creditors and regulatory agencies, and provide the advantages of a CPA’s technical expertise without the work and expense of an audit.

In compiling financial statements, we present information that is the “representation of management” and expresses no opinion of assurance on the statements.  Compilations don’t require inquiries of management or analytical procedures, but 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.

Understanding each report’s unique strengths and weaknesses, along with consideration of your specific circumstances, requirements of creditors or other parties, and budgetary needs, can help you choose the most appropriate one.  Contact Ward, Brady & Co. PLLC if you have questions about which type of report is right for you.