Compilations and Reviews

Other Business Accounting Services we offer:

Acquisition & Mergers
Bookkeeping
Business Exit Planning
Business Setup
CFO Services
Compilations & Reviews
Financial Planning
Forecasting & Budgeting
Payroll Processing
Tax Resolution

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Giving Your Investors Assurance

In a small business, compilations and reviews help business management and executives by preparing statements regarding the financial well-being of an organization. As a small business owner, you want to present your business in the best light possible for investors especially when you approach them for new or continued funding.

In the case of a compilation, no assurance is made by the CPA and thus is solely done on the premise that the company’s financial statements provided to the CPA are accurate and complete. From there, another set of financial statements known as a review provides only limited assurance by the CPA that the statements provided comply with accounting standards such as Generally Accepted Accounting Principles (GAAP).

Compilations may be done by a CPA for internal use at a company or to submit to an investor or lender such a bank. This level of financial audit is typically the lowest end in the audit range and likewise provides the least amount of assurance from the CPA that the statements indeed are correct. Rather than a comprehensive audit, this is meant as a simple way in which companies can have statements prepared by an independent firm prior to being submitted to a stakeholder or bank for further evaluation. At this level, a compilation of financial statements done by the CPA is the minimum requirement for most accounting-audit needs.

On the other hand, a company review is done with the intention of complying with a predetermined set of accounting standards, for example, the aforementioned GAAP. This is considered to be a step above a compilation but still ranks below an audit. A review may have a multi-step process, including but not limited to any of the following points: comparison with historical and industry figures, making inquiries regarding certain statements that appear to be inconsistent, investigation of unusual happenings or other difficulties which may take place, and examination major transactions which may occur at the end of particular accounting periods.
When inconsistencies arise, the reviewing accountant can recognize issues and notify any involved member of the company to discreetly disclose and solve the problem as needed. Focusing on which problems need to be solved first can help a company be prepared to leverage more debt if necessary by understanding current financial standings through reviews. Don’t discount the importance of quality accounting for your small business or organization. If you think you can get by just using your wits, it may work for a short amount of time; yet, this Modus Operandi can prove to be unsustainable. Make sure to have your bases covered so
different aspects of your company can remain watertight when that certain investor or important bank meeting comes along.

It is not always necessary or appropriate to perform a full audit of a company, however, when compilations and reviews are needed, you can trust JTC CPAs as your trusted partner in accounting solutions for your business.