Financial Statements and Analysis
Certified Public Accountants are the only people licensed in the State of Texas to provide audits, reviews, and compilations of financial statements. CPAs are required to complete extensive continuing education and undergo a periodic review process to ensure clients are provided with the highest level of service only CPA’s can provide.
A compilation involves an accounting service in which an accountant prepares financial statements without expressing any assurance that the statements are accurate and complete or in conformity with Generally Accepted Accounting Principles. An accountant generally performs few, if any, procedures, and it is substantially less than a review service report. For this reason the accountant’s compilation report will include wording similar to the following: "A compilation is limited to presenting in the form of financial statements information that is representation of management. We have not audited or reviewed the accompanying financial statements and, accordingly, do not express an opinion or any other form of assurance on them".
The next level of service is a review, a level of service that results in an expression of limited assurance. The accountant communicates this assurance in a report by stating that he or she is not aware of any material modifications that should be made to the financial statements to bring them into conformity with Generally Accepted Accounting Principles. The accountant must perform sufficient inquiry and procedures to give a reasonable basis for that conclusion. These inquiries and procedures are the major difference between a review and the next lower level of service, which is compilation.
The highest level of service is an audit. An audit is a methodical and objective examination of accounts and items supporting the financial statements of the company. For smaller non-public companies, the cost of an audit may exceed the benefits derived. Generally, the purpose of an audit is to express an opinion on or reach a conclusion about what was audited. Since we are usually contracted to provide outsource accounting, we work with affiliate public accounting firms through CPAConnect to provide independent audited financial statements.
Do your financial statements make sense? Would you prefer a plain language explanation of what the numbers mean to your business and how they compare to other businesses in your industry? Our exclusive Statement Sense Service uses sophisticated patented software technology to provide plain language reports to explain financial data including industry comparisons and trend analysis.
Make your business more profitable. For a clear picture of your company's current financial health, we recommend the Statement Sense report.
The report provides a detailed financial analysis that is logical and reliable, showing where your company currently stands in comparison to industry norms and making recommendations for improving profitability.
Finally, we will sit down with you to review the Statement Sense report. We will explain the results to you and answer any questions you may have. The process can end here, or you may wish to continue by taking advantage of our Business Coaching Services. Either way, the Statement Sense analysis is yours to keep and refer to as a valuable strategic planning tool. To learn more about it, please contact us.
Click here to view a Sample Report.