Audits, Reviews, and Compilations
CARUSO & SPENCER | CERTIFIED PUBLIC ACCOUNTANTS
The objective of an audit of financial statements is to provide a reasonable basis for expressing an opinion regarding the financial statements taken as a whole. An audit requires obtaining an understanding of internal control or assessing control risk and tests of accounting records and of responses to certain other procedures ordinarily performed during an audit.
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.
Audit
Review
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.
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
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
Which is right for you?
Each type of financial statement report may suit specific circumstances, depending on requirements from your lending institution or other parties, as well as meet budgetary needs. Understanding each report’s strengths and weaknesses can help you choose the most appropriate one. Please call if you have any questions which is right for you.