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Thanks for your interest in GRA CPA. At GRA CPA, we specialize in efficient and affordable Reviewed Financial Statements. In the world of CPA financial statements, there are four primary levels of service: Preparation, Compilation, Review, and Audit. This article addresses a Review, otherwise known as Reviewed Financial Statements.
A financial statement Review is a service under which the accountant obtains limited assurance that there are no material modifications that need to be made to your financial statements for them to be in conformity with the applicable financial reporting framework (such as GAAP, IFRS, or income tax basis – cash basis). Reviewed Financial Statements must be performed by an independent licensed CPA firm. The accountant must obtain evidence that will provide a reasonable basis for obtaining the limited assurance needed that there are no material modifications that should be made to the financial statements. This evidence is obtained by performing inquiries of management and performing analytical procedures and analyzing the results of those procedures. The accountant does not have to obtain an understanding of the entity’s internal control, assess fraud risk, test accounting records, or perform other procedures ordinarily performed in an audit.
Attest services uniformly include compilations, reviews, audits and agreed-upon procedures under the Uniform Accountancy Act (UUA) and AICPA regulations and may only be performed by licensed CPA firms. The CPA firm must follow the AICPA’s Statement on Standards for Accounting and Review Services (SSARS) when performing a Review and must be independent, as well as follow other best practices and ethical requirements. Additionally, each state has their own rules and applicable state laws regarding firm licensure, ethics, continuing professional education, and Peer Review requirements. You should always inquire as to whether or not your tax or accounting advisor is a licensed CPA firm, as many tax professionals and/or bookkeeping companies are unlicensed and unable to legally perform these types of services.
For GAAP compliant Reviewed Financial Statements, one would need to prepare the following:
- Engagement Letter
- Management Representation Letter
- Review Report
- Balance Sheet
- Income Statement
- Statement of Cash Flows
- Note Disclosures
The costs involved can vary based on the size, complexity, the nature of the business and the cleanliness/condition that your current financials/books are in.
So can GRA CPA review your financial statements if you are located in another state?
The answer – generally, yes! A CPA firm must be licensed in the state in which they are domiciled (physical location) and operate. CPA mobility is a national effort to adopt a uniform system that allows licensed CPA firms to provide services across state lines without being subject to unnecessary burdens that do not protect the public interest. GRA CPA is located and actively licensed in Florida and we adhere to Florida’s Statutes – REGULATION OF PROFESSIONS AND OCCUPATIONS – CHAPTER 473 – PUBLIC ACCOUNTANCY.
Please feel free to contact us at GRA CPA for any further information regarding Reviewed Financial Statements.