What is a financial review?

A financial review is a CPA service that provides limited assurance that the financial statements are free from material misstatement. The CPA performs analytical procedures and inquiries but does not verify underlying transactions, as an audit does. The review report states the CPA is 'not aware of any material modifications that should be made.'

More than compilation, less than audit

Reviews occupy the middle ground. More work than compilation: the CPA actually analyzes and questions, less than audit: no transaction testing or third-party confirmations. The limited assurance satisfies parties who need more than management's word but do not require full audit procedures.

Who requests reviewed statements?

Banks focus on mid-sized loans. Minority partners want independent verification, potential buyers during preliminary due diligence. Boards are uncomfortable with compilation-only. The review satisfies users who need assurance at a moderate cost.