What Service Do You Need? Financial or Forensic?

What’s the difference between financial statement preparation, a compilation, a review and an audit? Which one do we need? Knowing the answers to these questions could save your small business or nonprofit organization thousands of dollars in fees. Your lender may require a level of assurance (which can be provided by an audit or a review) regarding your financial statements; but be aware that some loan officers (who should know the difference) use the term "audit" generically. Ask if a review is sufficient. This brochure describes the differences between the various levels of financial statement services.

While a financial statement audit ensures that all the transactions are accounted for, it does not ensure that someone hasn’t stolen or misappropriated funds.  This is the number one reason for a forensic investigation. Another reason might be the absence of a requirement for annual financial statement audits. When there is no such assurance, certain forensic procedures could be beneficial. Finally, when reporting to the board of directors is untimely and/or confusing, a forensic investigation is a consideration, as it can be tailored to address specific issues.