Financial Statements
Audits, Reviews & Compilations
Financial statements are prepared for a business owner’s use to manage their business and are frequently used to fulfill some lenders’ documentation for loans. Financial statements can be prepared monthly, quarterly, or annually. The difference between an audit, a review, and a compilation is the level of assurance the CPA is providing, from no or limited assurance to the highest level of assurance, which is an audit. Olsen Thielen’s Audit Department can help you decide which level of assurance you need. No matter which level you choose, compilation, review, or audit, you will receive timely, accurate, and understandable financial statements.
Audit of Financial Statements
An audit is an objective examination and evaluation of the financial statements of an organization to make sure that the financial records are a fair and accurate representation of the transactions they claim to represent.
Our Approach to Audit Procedures
- Planning and Scheduling – We will establish the timetable for the audit and discuss with you the list of schedules we will need from you before the start of our audit fieldwork. We will discuss with you any issues identified which could potentially pose an issue during the audit.
- Review of Systems – We will review and document our understanding of your administrative/accounting systems and procedures. We will develop a list of recommendations we have concerning the efficiency and effectiveness of your internal control system and your operations which we note during this review.
- Fieldwork – We will then conduct the audit fieldwork, testing will include confirmation procedures, tests of details/transactions, inquiry, and analytical procedures.
- Resolution of Issues – We will discuss any potential journal entries with you, as well as the status of matters which could potentially delay the completion of the audit. We will hold a preliminary meeting to discuss the draft financial statements and management report with you.
Review of Financial Statements
A financial statement review is a service under which the accountant obtains limited assurance that there are no material modifications that need to be made to an entity’s financial statements for them to be in conformity with the applicable accounting framework (such as GAAP or IFRS).
Our Approach to Review Procedures
- Planning and Scheduling –Establish a timetable for the review. Develop and discuss with you a list of the information we will need before the start of fieldwork.
- Fieldwork – We will then conduct the review fieldwork, inquiry, and analytical procedures.
- Issue Financial Statements – Hold a meeting to discuss the preliminary financial statements.
The notable difference between Review and Audit is a review does not include the review of systems nor does it include the confirmations and detailed audit testing. As such, only limited assurance is provided.
Compilation of Financial Statements
A compilation consists essentially of presenting information obtained from a client in financial statement format. There is no assurance being provided by the accountant.
Our Approach to Compilation Procedures
- Scheduling – Establish a timetable for the compilation. Develop and discuss with you a list of the information we will need.
- Compilation Procedures – We will then conduct the compilation procedures by reading the financials provided and preparing a compilation report.
- Issue Financial Statements – Issue the Compilation report and compiled financial statements. The notable difference between Compilation and Review is a compilation does not include the inquiries or review procedures that are required to provide limited assurance. As such, no assurance is provided.
Contact a Specialist
Olsen Thielen’s Audit Department can help you decide which level of assurance you need. No matter which level you choose, compilation, review, or audit, you will receive timely, accurate, and understandable financial statements. Contact one of our specialists to discuss.
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