Review Vs Compilation
A Review is conducted when a lower degree of assurance than an audit is acceptable, yet the user wants to know that a professional has performed some analysis of the financial statements. During a Review, the CPA will inquire about your business, accounting policies and procedures, industry, operations and personnel. Ratio analysis, comparison of your operating statistics to prior periods as well as other financial analysis will be conducted so the CPA understands the key relationships among certain numbers. In the end, a Review gives more assurance about your financial condition as presented on the financial statements.
A Compilation is the lowest level of service a CPA can use to work with financial statements. A Compilation involves gaining a general understanding of your business and bookkeeping system. The CPA will present your financial information in the accepted format of proper financial statements and express no assurance about the accuracy of the numbers presented. The report attached to the financial statement emphasizes that the service is a Compilation.
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