Many clients do not require an audit of their financial statements, but still desire professional assistance with the preparation of their financial statements. For those clients, certified public accountants offer three levels of service which are generally less time consuming and therefore less costly than an audit.
A "review" is a service that is narrower in scope than an audit. It involves the use of analytical and inquiry procedures that, when successfully completed, allow us to state we are not aware of any material modifications that need to be made for your financial statements to be in accordance with generally accepted accounting principles or other appropriate financial reporting framework. The level of assurance provided by this service is becoming more widely accepted by regulators and financial institutions as a cost-effective means to meet their needs and that of the client.
A "compilation" is a service involving the preparation of financial statements based on information provided by the client. The statements are prepared in accordance with professional standards using the appropriate financial reporting framework for the client's industry. However, unlike an audit or a review, the report issued by the certified public accountant does not render an opinion or any other form of assurance on the financial statements. This service should be considered by clients who do not need an audit or review, but still want or need a CPA firm’s report associated with their financial statements.
"Preparation of financial statements" is relatively new as a standalone service. The statements are also prepared from information supplied by management in accordance with professional standards using the appropriate financial reporting framework for the client's industry. The difference from a compilation is the CPA firm preparing the financial statements does not attach a written report to the statements. Each page of the financial statements will include a statement that no assurance is provided. This service should be considered by clients who don’t need to report to outside authorities or financial institutions, yet want professional assistance with the preparation of their financial statements.