When a business or organization undertakes various transactions and commitments, the process may call for an independent CPA’s report on your financial statements. Cavanagh Ringelman, CPAs offers three levels of financial reporting services: Compilation, Review and Audit.
A Compilation is the simplest type of report. It indicates represents that the financial statements have been read and understood by the CPA, and identifies any known departures from Generally Accepted Accounting Principles (GAAP) or Other Comprehensive Basis of Accounting (OCBOA). It does not, however, provide assurance that the financial statements are free of misstatements or errors.
A Review is often needed for companies that who must report their financial results to third parties such as creditors, regulatory agencies or business owners. During a review, we interview company management and personnel as needed. We conduct both trend and industry comparative analysis to identify unusual items, “red flags” or anomalies in the financial statements that may require further analysis or adjustment. A review provides limited assurance that changes to the financial statements are not necessary to be in conformity with GAAP.
An Audit report requires the most in-depth analysis and field work by the independent accountant, and includes the highest level of assurance on the integrity and consistency of the financial statements. An audit report provides positive assurance that financial statements are fairly stated in accordance with GAAP on a basis consistent with prior years—in other words, that your numbers are right.