Financial Statement Preparation
Businesses need Financial Statements for different reasons and at different levels of
assurance as described below.
Types of Financial Statements (and some reasons for needing them)
- Compiled Financial Statements
- We compile financial statements solely from information provided by the business owner.
This type of financial statement is the kind most frequently requested by a
business owner wanting information about their businesses financial condition and the
results of their operations for the particular time period covered. Banks or other
third parties will frequently accept these financial statements to support requirements
for a line of credit or a loan request.
- Reviewed Financial Statenments
- Reviewed financial statements are subjected to higher professional standards and
additional accounting procedures than with compiled statements. Reviewed financial
statements are usually prepared at the request of a bank or other third party, rather than
by a business owner.
- Audited Financial Statements
- Audited financial statements provide the highest level of assurance on financial
statements prepared by a Certified Public Accountant. Audits of small businesses are
typically performed at the request of a bank, for some special need, or according to an
organizational document, such as that of a homeowner's or condominium association.
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