What are compiled financial statements?
A compilation is presenting in the form of financial statements information that is the representation of management (owners) without undertaking to express any assurance on the statements.
What are reviewed financial statements?
A review consists of performing inquiry and analytical procedures that provide the accountant with a reasonable basis for expressing limited assurance that there are no material modifications that should be made to the statement for them to be in conformity with generally accepted accounting principles (GAAP) or, if applicable, with an other comprehensive basis of accounting (OCBOA).
What are audited financial statements? The objective of an audit is to provide a reasonable basis for expressing an opinion on the financial statements taken as a whole. An audit includes obtaining an understanding of internal control and assessing control risk, tests of accounting records and of responses to inquiries by obtaining corroborating evidential matter through inspection, observation or conformation, and certain other procedures.
What is the comparative cost of the above three services? As a very general rule of thumb, a full-disclosure compilation is 35% of the cost of an audit; a review is 45% of the cost of an audit.
