Preparation · Compilation · Review · SSARS
Not every organization needs a full audit. Preparation, compilation, and review engagements produce a credible, GAAP-basis financial statement for a lender, a grantor, or a board without the cost and the calendar of an audit — and the right choice among the three depends on who is going to read the statement and what that reader has actually asked for.
Which level of service the reader needs
| Preparation | The accountant prepares the financial statements from information management provides. No assurance is expressed and no report is issued; each page carries a statement that no assurance is provided. This is a non-attest service, so independence is not required. |
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| Compilation | The statements are put into proper form and read for obvious material misstatement, and a report is issued. No assurance is expressed. Independence is not required, but where the firm is not independent the report must say so. |
| Review | Analytical procedures and inquiry give a basis for limited assurance — a statement that the accountant is not aware of any material modifications the statements need to conform with the applicable framework. Independence is required. This is the level most lenders mean when they say they want “more than a compilation.” |
All three are performed under the Statements on Standards for Accounting and Review Services — AR-C 70, 80, and 90 respectively. A review is not a small audit: it provides limited assurance through inquiry and analytics, not the evidence a reasonable assurance opinion requires. If a grant agreement, a loan covenant, or a state filing requires an audit, none of these three satisfies it, and the fastest way to find out is to read the requirement before commissioning the work.
What the engagement involves
- Reading the governing document — loan covenant, grant agreement, or bylaws — to confirm which level of service actually satisfies it
- Financial statement preparation on a GAAP basis, or on another basis where the reader accepts one
- Analytical procedures and inquiry of management, in a review, targeted at the accounts where misstatement is most likely
- Note disclosures, including the ones organizations most often omit — related parties, subsequent events, going concern, and debt covenant compliance
- Nonprofit statements under ASC 958, including net asset classification and functional expense presentation
- An engagement letter that states, in writing, what the service is and what it is not
How this firm runs it
Because there are no staff auditors, the same licensed CPA performs and signs off on the engagement from start to finish. That continuity is what shortens these engagements: there is no hand-off, no second pass to bring a reviewer up to speed, and fewer open items at the end. Where the firm is lean on headcount it makes up for it in technology — cloud-based tools and data analytics carry the reconciliation and documentation work, so CPA time goes to judgment and communication instead of paperwork.
The same quality management system the firm applies to its audit work applies here, and the same rule about independence: where this firm prepares the statements, it does not also audit them.
While Texas is home, the practice is borderless — clients are served nationwide, wherever they are located.
What settles it
A trial balance and the sentence in the loan or grant document that says what the reader requires. Those two together decide the level of service and most of the fee.
Send those documents securely — no account, no registration, and nothing sensitive travelling as an email attachment.