At: The request
What “reviewed statements” means
A lender asked for “reviewed statements” and you are not sure what that means.
What we do
Help confirming with the requesting party which level of service they need.
Compilations & Reviews
A compilation or a review puts a CPA firm’s report on your financial statements. Both follow the AICPA’s Statements on Standards for Accounting and Review Services (SSARS). Neither is an audit. A compilation provides no assurance: we present your information as financial statements without testing it. A review provides limited assurance: we ask questions and run analytical procedures, and report whether we found anything that needs to change.
Where compilations and reviews come into play as a business borrows and grows
The points where this service comes into play are numbered.
- Stage 1Internal reportsYour own monthly reports, good enough for you.
- Stage 2The requestA bank, surety, landlord or investor asks for financial statements.1
- Stage 3Which levelA compilation or a review: the agreement or the person asking decides.2
- Stage 4Statements and notesFinancial statements with the notes the framework requires.3
- Stage 5The reportThe accountant’s report goes with the statements.
- Stage 6Every year afterYou want outside statements on a regular schedule without the cost of an audit.
Numbered points are explained below.
The three points, explained
At: Which level
A compilation or a review
You are not sure whether a compilation will satisfy the person asking, or whether they need a review.
What we do
Compilation engagements under SSARS (AR-C section 80). Review engagements under SSARS (AR-C section 90).
At: Statements and notes
Statements in the form a third party asks for
Your internal reports are not in a form a third party will accept.
What we do
Financial statements with the notes the reporting framework requires. The accountant’s report that goes with the statements.
What the engagement includes
Request a proposal- Choosing the level
Help confirming with the bank, surety or investor which level of service they need.
- Compilations
Compiled financial statements under SSARS (AR-C section 80).
- Reviews
Reviewed financial statements under SSARS (AR-C section 90), with limited assurance.
- Notes to the statements
The notes the reporting framework requires.
- The accountant’s report
The report that goes with the statements.
- Something not listed?
Ask us. If it is US tax or accounting work, we will tell you plainly whether we can take it on.
How it runs
Confirm what is needed
We read the loan agreement or request and confirm whether a compilation or a review is required, and for which period.
First review
We look at your books for the period: whether they are closed and reconciled, which reporting framework fits, and what we will need from you before the work starts.
Fieldwork
For a compilation, we assemble the statements from your records. For a review, we also make inquiries and perform analytical procedures.
Report
We issue the statements and our report. You send them to the party that asked.
What is the difference between a compilation and a review?
A compilation provides no assurance. We present your information as financial statements without verifying it. A review provides limited assurance. We ask questions and run analytical procedures to see whether the statements need changes.
Is a review the same as an audit?
No. A review is much narrower than an audit. It is mainly inquiry and analytical procedures; it does not include the testing of controls and confirmations an audit requires.
Can you keep my books and also review my statements?
A review requires the accountant to be independent of you. Some bookkeeping work can affect independence. We assess this before accepting a review and tell you if the two cannot be combined.