What kind of financial statements should a borrower provide? Levels of assurance: Compilations, reviews and audits

Description

Abstract: Financial statements help lenders evaluate an organization’s performance and determine its ability to repay debt. But all financial statements aren’t subject to equal levels of analytical procedures, inquiry or testing by an outside accounting professional. In order of increasing level of rigor, CPAs offer three types of financial statements: compilations, reviews and audits. This article discusses what each can and can’t do and which one is appropriate for a given type of borrower.