Houston, TX Accounting Firm | Audits - Reviews - Compilations Page | Charles V Raimond, PC
Client Portal:  

Stockholders, creditors, and private investors often need assurance that the financial statements accurately represent the true financial position of a company.  There are three levels of assurance that accomplish this.


Audit - Highest Level of Assurance

 

An audit provides the highest level of assurance. An audit is a methodical review and objective examination of the financial statements, including the verification of specific information as determined by the auditor or as established by general practice.  Because it requires the most amount of time, it is the most expensive level of assurance.  It is a rare situation that dictates that a small business obtain an audit.  A review, or compilation, will usually satisfy most small business situations.  Due to the extensive amount of time required and expense involved, our firm has chosen not to perform audits.  If your situation dictates that you are required to have an audit, we will be happy to refer you to another firm that provides this specialty service.

 
 

Review - Limited Assurance

 

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 your company's 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 the Generally Accepted Accounting Principles (GAAP). Reviewed financial statements must include all required footnotes and other disclosures.

Why might a business request a review engagement? It can be a good middle ground, providing the advantages of a CPA's technical expertise without the work and expense of an audit.


Compilation - Lowest Level of Assurance

 

In compiling financial statements for a client, we present information that is the "representation of management" and expresses no opinion or assurance on the statements. Compilations don't require inquiries of management or analytical procedures. Instead, we 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.

Which Report Should You Use?

Each type of financial statement report may suit specific circumstances, depending on requirements from your client's bank or other parties, as well as meet budgetary needs.

Understanding each report's unique strengths and weaknesses can help you choose the most appropriate one. Please call if you have questions about which type of report is right for you.

 

Understanding each report's unique strengths and weaknesses can help you choose the most appropriate one. Please call if you have questions about which type of report is right for you or complete the form below for a Free Consultation.

Name
Phone
Email
Best Time To Call
Comments

Login   Search   Site Map   Privacy Policy   Disclaimer