- Review Engagement Report
- Compilation Engagement Report
Because I understand that every client has a unique situation, Evan Hutcheson, CPA, LLC’s assurance services provide a customized and personalized approach to address your particular needs. I see our duty in the financial reporting process as a chance to offer useful solutions to maximize the success and efficiency of your company.
Review – Limited Assurance
More in-depth than a compilation, yet not as extensive as an audit, a review engagement primarily consists of analytical procedures applied to financial statements as well as inquiries made of your business’s management team. If there are apparent inconsistencies in the financial statements or supporting details, additional procedures may have to be carried out.
A review doesn’t require that your company’s internal control’s be studied and evaluated, data be verified by third parties, or your assets be physically examined. A review report expresses limited assurance through the statement: “We are not aware of any material modifications” for the financial statements to be in conformity with Generally Accepted Accounting Principles (GAAP). All footnotes and other disclosures must be appended in a Reviewed financial statement.
Why might a company request a review engagement? It can be an excellent happy medium, providing the benefits of a Certified Public Accountant’s technical competence without the work and expenditure of an audit. Also, contractors in the state of Tennessee are periodically required to submit reviewed financial statements to the state board of contractors.
Compilation – Lowest Level of Assurance
When I compile my client’s financial statements, I present information from an objective viewpoint as the “representation of management” and do not express any opinion or assurance on the statements. Neither inquiries of management nor analytic procedures are required for Compilations. Rather, I rely on my knowledge of accounting principles and a basic understanding of your company.
Compilations from an independent Certified Public Accountant are typically required as one element of a Bank’s lending covenants.
Which Report Should You Use?
Each type of financial statement report may be suitable in particular circumstances. Much of it depends on the requirements of your client’s bank or various other parties, and also your budget.
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