Sooner or later somebody asks for statements. A bank underwriting a line of credit, a landlord assessing a commercial lease, a surety company writing a bond, an investor doing diligence, or a franchisor exercising an audit right. What they are really asking for is a licensed professional's association with the numbers.
There are three levels and they cost very different amounts. Most small businesses need the least expensive one and are quoted the most expensive one because nobody explained the difference. We will read the actual request letter and tell you which level it requires.
The three levels
In ascending order of cost and of assurance. Choosing correctly is usually worth more than anything else in this engagement.
Preparation
Statements prepared from your records with no assurance and no report. Fine for internal use and for some landlords.
Compilation
We present your figures in the proper format and issue a report. No assurance is expressed, but a CPA's name is on it. This satisfies most small-business lending requests.
Review
Analytical procedures and inquiry, resulting in limited assurance — that we are not aware of material modifications needed. This is what most banks mean when they say they need something more than a compilation.
Audit
The highest level. We do not perform audits in this office; where one is genuinely required we prepare you for it and refer you to a firm that does, which is cheaper than paying an audit firm to clean up first.
Also prepared here
Personal financial statements
For mortgage applications, bonding, and immigration and visa filings.
Projections and forecasts
For SBA loans, business plans and lease negotiations.
Agreed-upon procedures
Where a third party wants one specific thing verified rather than the whole picture.
Audit readiness
Working papers, schedules and reconciliations assembled before the audit firm arrives, on their timetable.
General information, current for the 2026 filing season and not a substitute for advice on your own facts. Tax law changes, and the answer for your situation may differ. Speak to us before acting on anything you read here.
Questions
Financial Statements — the questions we are asked most
My bank asked for 'CPA-prepared financials'. What do they mean?
Almost always a compilation, sometimes a review. Send us the request letter — the distinction is worth several thousand dollars and lenders very often accept a lower level than the first draft of the letter suggests.
Can you audit my company?
No. This office performs preparation, compilation and review engagements. Where a genuine audit is required we prepare the file and refer you on, which usually reduces the audit firm's fee by more than our preparation costs.
How long does a compilation take?
About two weeks from the point your books are closed and reconciled. If the books are not closed, that comes first and we will tell you what it will take.
Do statements have to be US GAAP?
Not necessarily. Tax-basis statements are cheaper to produce and are accepted by many lenders. We ask the lender before assuming GAAP.
Related
Often needed alongside this
Business
Business Tax Returns
Federal and New York returns for S corporations, C corporations, partnerships and LLCs — prepared, reviewed and e-filed by a CPA.
Read more
Business
Small Business Accounting
A finance department for a business too small to hire one: monthly closes, management reporting, and a CPA on the phone when a decision needs one.
Read more
Business
Bookkeeping
Clean, reconciled, current books — kept monthly by people who know what the year-end return will need from them.
Read moreThe first conversation is free
Talk to a CPA before you decide anything
Twenty minutes on the phone or across a desk on Roosevelt Avenue. Bring last year's return if you have one — most of what we need in order to quote you is already in it.