Compilations and reviews can be cost-effective and efficient methods to add credibility to, and determine the reliability of, financial statements. Both are less intensive and substantial in scope than an audit.
A compilation is the simplest service conducted on a client’s financial statements. It presents financial information in the form of financial statements without undertaking procedures to provide assurance that there are no material modifications to be made. Compilations are used by management for internal-use purposes as well those situations where an audit or review is not needed.
A review engagement requires all of the procedures necessary for a compilation plus additional analytical and inquiry procedures. RotenbergMeril uses analytical procedures applied to the financial data, such as comparing current to prior period financial statements as well as inquiries of company management and personnel, to determine that the financial statements are in conformity with generally accepted accounting principles. The purpose is to ensure that no material modifications need to be made to the financial statements.
Both compilations and reviews are used by business owners and management for internal-use purposes when an audit is not necessary. External parties such as banks, suppliers and regulatory bodies will often need at least this level of involvement by external CPAs in the financial reporting process. Find out how the RotenbergMeril experts can assist you with your compilation and review needs.
Contact Larry Meril, Director of Audit and Accounting