Financial Statement Preparation, Compilation, & Review

The Accredited Business Accountants at Simply Counted will work with your company on financial statement preparation, compilation, and the financial statement review process. Financial statements are a necessary tool for any business. and assist owners and managers in making operating decisions, enabling creditors to evaluate loan applications, and provide individuals with the information needed to make investment decisions. Since financial performance is a must for privately-held businesses, publicly owned-corporations, and non-profit organizations, the compilation and review process is not only beneficial, but necessary. Financial compilation, financial statement preparation, and a financial statement review are offered separately or together, based on the needs of the business or non-profit organization. Contact an accredited business accountant at Simply Counted located in Holland, MI to get a clear picture of your business’ financial processes.

Financial Statement Preparation

Financial statement preparation and compilation services are offered on a monthly, quarterly or annual basis. This service offers no assurance as to whether material or significant changes are necessary for the financial statements to be in conformity with Generally Accepted Accounting Principles (GAAP), the cash basis, or the income tax basis of accounting. During the financial statement preparation, the data is simply compiled and arranged into conventional financial statement format. No probing is conducted beneath the surface unless one of our Accredited Business Accountants (ABA) becomes aware that the data provided is in error or is incomplete. The compilation services being performed by the accountant will take a “common sense” look at the entity to decide whether the client needs other accounting services. He or she will look at areas that may need additional research and attention, such as assistance in adjusting the accounting records.

A financial statement compilation conducted by an Accredited Business Accountant includes:

  • The Accredited Business Accountant being familiar with the accounting principles and practices common to your business’ industry/entity.
  • Acquiring a general understanding of your company’s transactions and how they are recorded.
  • After the financial statement preparation, the accountant reads the statements and considers whether they are appropriate in form and free from obvious material errors. While the financial statements were compiled, they were not reviewed, therefore no opinion is expressed, based on the information provided.

Financial Statement Review

A financial statement review includes inquiry and analytical procedures as applied to financial statements of private entities. A private entity engages an Accredited Business Accountant (ABA) to perform a review of its financial statements and issue a report that provides limited assurance that material changes to the financial statements are not necessary. With respect to reliability and assurance, a review falls between a compilation, which provides no assurance, and the more extensive assurance of an audit.

Before a financial statement review, the Accredited Business Accountant may have to prepare and compile the statements. However, in all cases, the financial statements are management’s statements, not the accountant’s. Management must have a sufficient understanding of the financial statements to assume responsibility for them.

Two other factors differentiate a financial statement review from a compilation — the Accredited Business Accountant must remain independent of the client during a review, and all appropriate notes must be included in the reviewed statements. In a majority of the cases, financial statement compilation and review are performed at the same time.

An accredited business accountant uses the following process when conducting a financial statement review:

The Accredited Business Accountant makes inquiries concerning such financial statement-related matters as accounting principles and practices, bookkeeping practices, accounting policies, actions of the board of directors, and changes in business activities. The ABA may complete regular bank statement reconciliations if requested. They will then apply analytical procedures designed to identify unusual items or trends in the financial statements that may need explanation. Essentially, a review is designed to see whether the financial statements “make sense” without applying audit-type tests.

Keep in mind that during a review, the Accredited Business Accountant does not confirm balances with creditors, observe inventory counting, or test selected transactions by examining supporting documents. However, in many instances, a review—with its limited assurance —may be adequate for a business or its creditors. If more assurance is necessary due to a requirement of the industry, etc., the organization may need to engage a CPA to perform an audit.

Simply Counted Business Service, Inc.’s financial statement compilation & review procedure check list identifies a starting point for our working monthly, quarterly or annual relationship.

  • Review & Reconciliation
    • Regular Bank and Account Reconciliation
    • General Ledger Posting Accuracy
  • Payroll Review & Quarterly Reporting Compliance
    • Monthly/Quarterly Reports -941/MESC/940/StateW/H
    • Worker’s Comp Audits
    • Year End Reconciliation, Annual Reports, W-2’s
    • Income Withholding Order (FOC – Garnishments)
  • Asset List/Depreciation Reporting
  • Financial Statements: Income Statement; Balance Sheet; Cash Flow Statement
  • Taxes
    • Corporate Taxes
    • Industry-Specific Taxes (sales, excise)
  • Budgeting
  • Loan Amortization Schedule (s)
  • IT Resources
    • Regular off-site back up of digital accounting records
    • Remote access connection to provide timely availability of accounting data minus loss due to portable back up/restore issues
  • HR Resources/Compliance if Requested
  • Annual Budgeting If Requested