Before you make a major step with your business—such as partnering with or buying another company—you’ll want to take a closer look at your financial records, double-checking for any flaws or red flags. In a way, it’s similar to inspecting a house before putting it on the market. In this case, your certified public accountant will likely offer one of three choices: an audit, a review, or a compilation of your financial reports. To choose the best option for your enterprise, take a look at the guide below.

Overview of Audits

If your situation calls for an in-depth look at your finances, opt for an audit. This is the most meticulous and comprehensive option, requiring the most work from both you and your certified public accountant. During the process, your accountant will pore over all available financial evidence, reach out for supporting and source files, administer testing and verification procedures, and confirm specifics with third parties. This is an excellent option to rule out errors and fraud for those who are planning to sell their business, carry out major financing, apply for extended credit, become a publicly-traded company, raise their equity, or receive funding from the government.

Overview of Reviews

If you choose a review, your CPA will talk to you in detail about the company’s accounting practices and policies, review all the financial records and documents you provide and use analytics to compare balances from current and previous years. Reviews are helpful for companies seeking relatively small loans or lines of credit, or as a precursor to an audit to make things easier in the future.

Overview of Compilations

For a brief overall assessment of your financial records, you can ask your CPA to complete a compilation. Essentially, they will review all the basics of your readily available financial statements, so you won’t have to do any time-consuming preparatory work like contacting lenders and digging through file cabinets. Once they crunch the numbers, they will draft a cover page that offers a generalized take on your financial standing. Since this option provides much more vague results and showcases an association with an accountant, it’s generally only used to apply for a personal loan.

If you are interested in hiring a certified public accountant to complete a compilation, review, or audit, get in touch with Cloyd & Associates PSC of London, KY. They serve individual clients and businesses throughout Laurel County, helping to clear reports for your financial needs. They can also help you prepare for tax season and the audits that may follow. To learn more about their skills, visit their website, or call (606) 864-8110 today to schedule an appointment.