Audit & Assurance Services
As your business grows, the need for third-party disclosures and Financial Statement Preparation grows. Whether you are looking for a Audited, Reviewed or Compiled Financial Statements, Tidwell & Associates can help find the right solution for you.
The first step in determining what level of Financial Statement or Assurance services you need is to understand the difference between the various types of financial statement services that are available; namely, Financial Statement Preparation, Compiled Financial Statements, Reviewed Financial Statements and Audited Financial Statements.
What is Financial Statement Preparation?
Financial Statement Preparation is the lowest level of financial statement reporting. These reports are prepared based on data you provided to us and are intended to be used for internal or management purposes only. We provide this type of Internal Financial Statement reporting as a part of our bookkeeping services that we provide to our clients. Learn more about our bookeeping services and how they can help your business here.
What are Compiled Financial Statements?
Complied Financial Statements, commonly referred to as a Compilation, is a service provided by a CPA where the CPA analyzes a company's financial statements and considers whether the financial statements are in appropriate form and are free from obvious material misstatements. A Compilation is typically intended for use in disclosure to outside parties who may appreciate the business's association with a CPA without requiring a level of assurance on the accuracy of the financial statements. A Compilation is typically appropiate when initial or lower amounts of financing or credit are sought or significant collateral is in place. The Compilation consists of the Compiled Financial Statements, as well as a Compilation Report prepared by the CPA Firm.
What are Reviewed Financial Statements?
Reviewed Financial Statements are intended to provide lenders and other outside parties with a basic level of assurance on the accuracy of a company's financial statements. These types of Reviews require the CPA to understand the industry in which you operate, preform analytical procedures, inquiries and other procedures to obtain knowledge about your business and the accouting principles and practices that you use in order to obtain a limited assurance on the financial statements and is intended to provide the user with a level of comfort on their accuracy. The Review is the base level of CPA assurance services. A Review is typically appropriate when a business grows and is seeking larger or more complex levels of financing or credit. The Reviewed Financial Statements consists of actual financial statements, a review report issued by the CPA as well with their conclusions as well as their recommendations as to whether or not there should be any material modifications made to the financial statements.
What are Audited Financial Statements?
Audited Financial Statements are the highest level of assurance service that a CPA can perform. In an Audit, a CPA is required to obtain an understanding of your business's internal controls and assess fraud risk in addition to corroborating the amount and disclosures included in your financial statements. This is done by obtaining audit evidence through inquiry, physical inspection, observation, third-party confirmation, examination and other analytical procedures. As the highest level of assurance, an audit is typically appropriate and often required when you’re seeking complex or high levels of financing and credit. An audit also is appropriate if you’re seeking outside investors or preparing to sell or merge with another business. The Audited Financial Statements consist of the actual financial statements and a formal report where the CPA expressed an opinion on whether the financial statements are presented fairly and in all material aspects, in accordance with the applicable financial reporting framework. In addition, the CPA is required to report to you any significant or material weaknesses in your system of internal control that are identified during the audit.