May & Associates, CPA's, P.C.

Financial Statements

Depending on your needs, monthly, quarterly and year-end balance sheet and detailed operating statements can be prepared and analyzed on a timely basis. The state-of-the-art accounting software used in our office can provide helpful comparisons and calculations for effective, practical business analysis. Many times we are asked to explain the differences between a compilation, review, and an audit. So that you may better understand the three types of service, the following is a brief description of each:A Compilation is merely presenting in financial statement form, the financial information that is given to us by you. We do not verify anything. It simply presents your information under generally accepted accounting principles (GAAP) or other comprehensive basis of accounting (OCBOA). A compilation is the only financial statement service in which disclosures or footnotes and the Statement of Cash Flows can be omitted. A compilation is also the only service that a CPA can provide to their client and not be independent.A Review is just as its name implies. We follow specific procedures to review the books and records to look for any "material" misstatements in the financial statements. The review report itself contains negative assurance in that it states that "nothing came to our attention" while reviewing your books. A review requires a complete set of financial statements as well as footnotes.Audits. Someone once said that "an audit is where one goes into a battlefield after the battle and bayonets the dead". Unless you absolutely have to have one, don't! An Audit requires the obtaining of outside third party evidence, test of the accounting records, test of the internal control structure of the organization, and many other procedures in order to render an opinion that your financial statements are "fairly presented in all material respects". An audit can be an extremely time consuming and costly endeavor.We hope this information will help you make an informed decision.