Compiled, Reviewed and Audited financial Statements can only be prepared by Certified Public Accountants that undergo a peer review every 3 years. Additionally, Certified Public Accountants who perform these services are required to have professional insurance and must keep their Certified Public Accountant license in a current status by taking 40 hours of education credits annually.
A compilation is a CPA prepared financial statements from information provided by management.
A "reviewed" financial statement is the next level of assurance that a CPA can apply to a company's financial statement. A reviewed financial statement is a compilation, plus a CPA applies inquiry and analytical procedures to financial statements provided by management to determine if they are reasonable.
An "Audited" financial statement is a reviewed financial statement plus verification of elements of the statements by outside parties, physically inspecting assets and observations, and testing selected transactions and examining supporting documents. An audit is the highest level of assurance that the accountant can provide and that the financial statements are in compliance with generally accepted accounting principles.
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