Audits, Reviews, and Compilations for Privately Held Businesses
Audits Reviews Compilations
The right financial statement engagement depends on who will use the statements and the level of assurance they require.
Audits reviews and compilations give businesses different levels of financial statement assurance based on lender, investor, regulatory, and management needs.
Lenders, investors, owners, boards, and other stakeholders may require financial statements prepared at a specific level of assurance. Meinershagen & Co., LLC helps businesses understand the differences among audits, reviews, and compilations and select the service that fits the intended use.
An audit provides the highest level of assurance and includes procedures designed to obtain evidence about amounts and disclosures in the financial statements. A review provides limited assurance through analytical procedures and inquiries. A compilation presents financial information supplied by management without providing assurance. The appropriate engagement depends on stakeholder requirements, risk, cost, timing, and how the statements will be used.
Explore our Accounting Services or review AICPA resources at the official source.
Audit Services
Audits may include testing selected transactions and balances, confirming information with third parties, evaluating accounting principles and significant estimates, and assessing financial statement presentation. The result is an independent auditor’s report on whether the statements are presented fairly in accordance with the applicable reporting framework.
Review Services
A review is narrower than an audit. It primarily uses inquiry and analytical procedures to identify relationships or items that may require further investigation. Reviews can be appropriate when outside parties need limited assurance but do not require an audit.
Compilation Services
A compilation assists management in presenting financial information in financial statement form. It does not provide assurance, but it can help create organized statements for internal use or for third parties that accept a compilation.
Why Audits and Reviews Matter
Reliable financial reporting can strengthen lender relationships, support governance, improve accountability, and help leadership identify issues earlier. The engagement should be planned around the organization’s reporting deadlines and stakeholder expectations.
Discuss Your Reporting Requirements
Contact Meinershagen & Co. to review your deadline, stakeholder needs, and the appropriate financial statement service.
Frequently Asked Questions
An audit provides reasonable assurance based on more extensive procedures. A review provides limited assurance and relies mainly on inquiries and analytical procedures.
No. A compilation presents management’s financial information without expressing assurance on the statements.
Start with the requirement in your loan agreement, investor request, contract, or governance policy. We can help clarify the level of service that matches the intended use.