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Compliance Services: Audit, Review, Compilation

From time to time, almost every organization has to report how the organization is doing financially. These reports help investors and creditors evaluate the business and help owners make management decisions. The accounting profession has three distinct financial statement services, all of which are provided by Rosoco.

Value-added audit


An audit provides the highest level of assurance on a company’s financial statements. In an audit, the CPA examines financial statements by conferring with outside parties, completing physical inspections and observations, and testing selected transactions by examining support documents. While not designed to detect fraud, an audit provides assurance that the “financial statements are free of material misstatement and are fairly presented”. An effective audit should also add value by providing practical suggestions to strengthen internal controls, improve operational efficiency, and enhance systems and procedures.

Review


A review provides limited assurance that no material changes are needed to the financial statements. A review is useful to management and others who want a “does it make sense?” analysis.

Compilation


A compilation provides no assurances. Basically, the CPA takes the numbers provided by the client and puts them in financial statement format. Because there is no analysis, the CPA is not allowed to render an opinion.

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