AAScorecardFinancial statements provide an EKG of the heart of your business.

Finances are at the heart of your business.  Given the importance of your financial statements, careful consideration of the level of assurance provided by your CPA is warranted. The type of scorecard used by your CPA is based on the level of service provided.

Financial statements come with a variety of choices including the types, framework (i.e. basis or standards), and level of assurance.  These choices are aimed at providing the users (management, banks, investors, etc.) with decision-relevant insight into the health and operations of the business. Financial statements can be for management’s use only or for the most sophisticated investor.  Financial statements can include multiple statements (such as the balance sheet, income statement, etc.) or just one statement. They can include or omit footnotes. They can also be based on many different frameworks such as cash basis, accounting principles generally accepted in the United States of America (U.S. GAAP), and international financial reporting standards (IFRS).

AssuranceServiceChartRegardless of the types of financial statements, the accounting framework used, or the level of service provided, our team’s industry-specific expertise is designed to increase your efficiencies and provide excellent client service. The “hands-on” involvement and ongoing communication from our partners are coupled with tailored solutions to meet your needs.

Once you’ve decided the types of and basis for your financial statements, the next question is, “What level of service do you and the other users of your financial statements need?”

Dispelling the Myth

A financial statement audit and fraud examination are not created equally.

Financial Statement Audits Aren’t Designed to Identify Fraud

Comparison of Levels of Assurance

Straight Talk

Translating technical jargon into a plain English “text.”
I’m not sure if I need financial statement preparation, a compilation, a review, or an audit. What’s the difference in these services?
Financial statement preparation is the most basic service level. We help you gather your financial information and provide it to you, but there’s no assurance. In fact, there is no report provided, and the statements are marked “no assurance provided.” As an example, if you were evaluating the tires on a car, this service is the equivalent of the valet pulling your car around and handing you the keys.
I’m starting to see the picture. Can you describe a compilation and a review?
A compilation is the next level of service. We help you present financial information in the form of financial statements, and while we do provide you with a report, there is still no assurance. In our car example, it’s the equivalent of walking around the car and documenting that it has four tires.
For a review, we start applying limited procedures (e.g. analytics and inquiry) to gain limited assurance that no material modifications are needed to be in that applicable financial reporting framework (i.e. negative assurance).
So a review would be similar to asking the car owner when they bought the tires and when they last rotated them—followed by scanning the odometer’s mileage and maybe kicking the tires?
Exactly! Finally, for an audit, we perform multiple procedures so that we can form an opinion on the financial statements. The goal is to obtain reasonable assurance to provide an opinion that the financial statements are free from material misstatements and materially comply with a selected framework.
I get it. The audit is similar to requesting an experienced and objective mechanic to evaluate your tires with the appropriate tools, gauges, and knowledge of the brand.
Precisely! Why don’t we sit down and discuss what might work best for your business?
Melody Salter, Finance Director, City of Homewood, Alabama
“Carr, Riggs, and Ingram provides audit and compliance services to our City. CRI is always responsive to our needs and they provide timely services and deliverables. In an environment of changing and complex governmental accounting pronouncements, CRI serves us in an advisory capacity that fulfills our technical needs. CRI also provides consistent staffing on our engagement and active partner participation in our audits. CRI is also available to advise our elected officials on pertinent matters ranging from new accounting pronouncements to internal controls in a government environment. We appreciate the commitment to service that CRI offers and their role in advising our City in complex accounting and auditing matters. ”



4 Red Flags of A Potential Going Concern Issue

Difference Between Audits, Reviews, & Compilations

5 Tips for Financial Statement Audit Preparation

Audits, Reviews & Compilations

Comparing service levels.
Financial Statement PreparationCompliationReviewAudit
Assurance ProvidedNoneNoneLimited negative assuranceHigh level of reasonable assurance
Intended AudienceBusiness owners to manage the businessLenders and other outside parties not requiring assuranceLenders and other outside parties desiring a basic level of assuranceCreditors, investors, and other outside parties desiring high level of comfort
Appropriate ForPotentially some lender’s documentation for small loansInitial or lower amounts of financing with significant collateral in placeGrowing businesses seeking larger levels of financingGrowing businesses seeking high levels of financing or selling a business
Report IssuedNoneYesYesYes
Frequency (Generally)Monthly, quarterly, or annuallyMonthly, quarterly, or annuallyMonthly, quarterly, or annuallyMonthly, quarterly, or annually

Solutions Simplified

Down-to-earth descriptions of our services.


CRI’s team will begin with an understanding of your business plus its processes and internal controls that are used to develop your financial statements.  We will then use that understanding to develop a program for testing through inquiry, analytics, and detailed substantive verification procedures (e.g. vouching and tracing items to details and back-up).  The goal of the audit is to determine—with a high level of reasonable assurance—if the financial statements are free of material misstatement and fairly stated in light of the applicable framework. An audit report is the highest level of assurance to any party, including third-parties.


CRI’s team analytically reviews financial information and makes inquiries of your organization’s management team — in an effort to determine whether material modifications should be made to the financial statements in order for them to conform generally accepted accounting principles. A review engagement does not entail detailed verification and testing or gathering an understanding of your internal controls, but it does provide limited, negative assurance to third-parties such as insurance companies and financial institutions.


A compilation is the most basic attestation service provided by CRI or any CPA firm (i.e. it’s our most basic form of report). Our team compiles the business’ books and records but does not perform any verification (not even inquiry or analytics) of the financial data. It may be used internally and is also acceptable to some lenders and third-parties.

Financial Statement Preparation

Financial statement preparation is our most basic level of service. Our team does not perform any verification of the financial data, and we pull the numbers together in your chosen format.  The financial statements will be marked with “no assurance is provided.” While you may share the financials with third-parties, the financial statement preparation service is really aimed at meeting management’s internal needs.