Compiled vs Reviewed Financial Statements

When it comes to financial statements, businesses have various options to choose from. Two common types are compiled and reviewed financial statements. Each type has its own set of benefits and purposes, catering to different needs and requirements.

Compiled Financial Statements

Compiled financial statements are a representation of a company's financial position, profitability, and cash flows. These statements are prepared by a company's accountant without any assurances or auditing procedures. They are typically used for internal purposes or for small businesses with simple financial structures.

Reviewed Financial Statements

Reviewed financial statements, on the other hand, involve a higher level of assurance compared to compiled statements. Reviewed statements are evaluated by an independent CPA firm, providing limited assurance that they are free from material misstatements. These statements are often used by stakeholders such as investors and creditors.

Differences and Considerations

One key difference between compiled and reviewed financial statements is the level of assurance provided. While compiled statements offer no assurance, reviewed statements offer limited assurance but stop short of providing full assurance like audited statements.

Businesses should consider their specific needs and requirements when choosing between compiled and reviewed financial statements. Factors such as the size of the company, the complexity of its financial transactions, and the needs of stakeholders should all be taken into account.

Conclusion

Both compiled and reviewed financial statements play crucial roles in the financial reporting process. Understanding the differences between the two types can help businesses make informed decisions about which type of statement is most appropriate for their needs.

For more information on compiled vs reviewed financial statements and how they can benefit your business, contact Tax Accountant IDM today.