Financial statement audit and review

Lenders, investors, boards and regulators often ask for financial statements that someone independent has examined. A CPA firm can do that through an audit or a review.

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Fairview Audit connects you with a partner firm that performs the engagement. Fairview does not perform it.

What the work looks at

A CPA firm examines your financial statements and issues a report. The level of assurance depends on the type of engagement.

  • Audit: the firm understands your controls, assesses risk and tests the numbers to form an opinion on whether the statements follow the reporting framework. It gives high, but not absolute, assurance.
  • Review: the firm relies mainly on inquiries and analytical procedures. It gives limited assurance and does not express an opinion on the statements as a whole.
  • Compilation: the firm helps management present the statements and gives no assurance. The firm need not be independent but must disclose any lack of it. Some partner firms may offer it. [CONFIRM: a partner firm supplies and approves the list of engagement types offered]

Audits and reviews both require the firm to be independent of your business. Audits are often asked for in complex deals such as bringing in outside investors, selling a business or a merger. The standards that govern each engagement type are set by professional bodies and differ by country and by type of entity. [VERIFY: which standards apply to the engagement you need, for example AICPA or PCAOB standards]

What you provide

Your partner firm will tell you exactly what it needs. Most engagements start with the following.

  • Trial balance and general ledger detail for the period
  • Draft financial statements, if management has prepared them
  • Bank and loan statements, and debt agreements
  • Fixed asset and depreciation schedules
  • Payroll records and tax filings
  • Key contracts and leases, including amendments
  • Minutes of board or owner meetings
  • Prior year statements and any prior auditor correspondence
  • Contact details for the people who can answer questions about each area

If your records are incomplete, say so early. A partner firm can often tell you what to fix before fieldwork begins.

What happens after you submit a request

  1. You submit a request on the path that fits your business.
  2. A partner firm contacts you to discuss the purpose of the statements, who will receive them and the period covered.
  3. You agree on the type of engagement with the firm. Your lender or regulator may dictate the choice, so ask them first if you can.
  4. You share documents and answer questions as the firm works.
  5. The partner firm reports its findings to you and issues its report.

The engagement and any fees are between you and the partner firm under the firm's own terms.

Who it suits and how matching works

This service suits owners and finance leads whose lender, investor, grantor or regulator has asked for audited or reviewed statements. It also suits businesses preparing for a sale, a financing round or a change in ownership.

Fairview offers three request paths: larger business, smaller business, or not sure or another need. There is no fixed size cut-off. Fairview matches each request by hand. Each path leads to its own form: larger business, smaller business or not sure. Your request goes to the matched partner firm. If you choose the not sure path, Fairview matches it by hand. After that, you talk with the partner firm directly.

Partner firms are independent firms.

Who does the work

An independent partner firm that specializes in financial statement audit and review handles this work. Fairview Audit makes the match. We do not perform the review ourselves.

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Frequently asked questions

Do I need an audit or a review?

It depends on who asks for the statements. Lenders, investors and regulators usually name the level they accept. A review involves less work than an audit and gives less assurance. Ask the requesting party before you choose.

Can the firm that prepares my books also audit them?

Independence rules limit what an audit firm may do for an audit client. Ask each firm how it handles this. [VERIFY: current independence rules for the engagement type]

How long does an engagement take?

That depends on the size of your business, the state of your records and the type of engagement. Your partner firm will set out the timing with you.

Will my team still be involved?

Yes. You answer questions, supply records and review draft findings. The firm cannot complete the work without your input.

Does Fairview issue the report?

No. The partner firm issues any report under its own name and its own professional responsibility.

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Find out what you are overpaying.

Tell us what you need reviewed. We match you by hand with an independent partner firm. You keep your existing vendors.

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