Financial statement compilations are the most straightforward and simple types of reports. Compilations are essentially a cover page that accompanies your financial statements. When you have a compilation financial report, it demonstrates to creditors and stakeholders that you’ve taken the time to partner with a CPA firm.
Compilations, however, do not offer any real assurance on the accuracy of your financial statements. When we create a compilation, we’ll do a cursory check on the essential features of your statements. In most instances, the compilation statement is sufficient for small businesses looking for personal loans. Business loans will usually require a more in-depth financial statement, such as a review.
While the compilation report offers no assurance, the review report offers limited assurance. With a review report, our CPAs will review and inquire about your financials. We’ll make inquiries concerning the accounting principles and practices used by your business. We will also conduct analytical procedures to understand your prior-year and current-year balances.
In most instances, a review will satisfy the needs of potential buyers, lenders, and investors. These reports can be helpful in obtaining smaller business loans or lines of credit. At the same time, businesses can utilize the review as a way to reduce challenges associated with the first-year audit.