Reviews, Compilations & Preparation of Financial Statements
Privately-owned businesses and nonprofit organizations alike must prepare reports on their financial performance. Owners, managers and creditors use financial statements to help chart the course for the future, determine the value of the business, and to make decisions regarding credit worthiness.
The appropriate level of engagement is determined by your needs as a client, and what your creditors and/or investors require. As your trusted business advisor, AAFCPAs will help you determine the most appropriate level of service that you need.
AAF’s unique approach to service delivers much more than the required compliance. Our expertise is delivered hands-on by our partners, who are approachable, easily accessible and proactive with advice to solve your issues. You will experience impeccable service.
What level of service is right for you?
In review engagements, AAF provides privately-owned company and nonprofit executives with limited assurance that there are no material modifications that should be made to your financial statements in order for them to be in conformity with the applicable financial reporting framework; whether that is US GAAP, tax basis, or in accordance with a special purpose framework. AAF applies inquiry and analytical procedures to the financial statements provided by management to determine if they are reasonable.
A review level of service is generally valuable and appropriate when: users do not require an audit; the expense of an audit is a significant element of the decision; your sources of credit wish to evaluate your company or nonprofit based upon US GAAP financial statement reporting; and those charged with governance desire a level of assurance, but do not insist upon an audit.
Our review will include all procedures tailored to your situation and required by the Statement of Standards for Accounting and Review Services (“SSARS”) as promulgated by the Accounting and Review Services Committee established by the AICPA in 1972.
AAFCPAs’ compilation engagements assist privately-held companies in presenting financial information in the form of financial statements. For compilation engagements, standards do not require AAF to make inquiries or perform other procedures to verify, corroborate, or review the information supplied by the entity. For this reason, AAF neither obtains nor offers any form of assurance on the content of the financial statements. AAF’s compilation solutions are most useful when limited in-house capabilities exist.
AAF compilation engagements include all procedures tailored to your situation and required by the Statement of Standards for Accounting and Review Services (“SSARS”) as promulgated by the Accounting and Review Services Committee established by the AICPA in 1972.
Preparation of Financial Statements
In October 2014, the AICPA issued a new Statement of Standards for Accounting and Review Services (“SSARS”). Called SSARS No. 21, Statements on Standards for Accounting and Review Services; Clarification and Recodification, this new standard is effective for all reviews, compilations and preparation of financial statements for periods ending on or after December 15, 2015, or effectively all calendar year 2015 year ends and beyond. This standard provides for nonattest, financial statement preparation services that AAF may provide for clients.
AAFCPAs nonattest, financial statement preparation (or drafting) services are valuable to early-stage companies and/or nonprofits, where no formal financial statements are required, but where there is a desire for the benefits of financial statements to complement a tax return.
AAFCPAs is engaged to perform preparation of financial statements: prior to audit or review by another accountant; for management use only; when a single financial statement is needed, such as a balance sheet or profit and loss; or when information is used in a general ledger to prepare financial statements outside of an accounting software system.
As with other nonattest accounting services, AAF is not required to consider whether we are independent.