Many businesses need financial statements prepared in order to satisfy banking requirements, report financial information to investors, or the like. Most in-house accounting software products can produce these statements automatically. However, most readers of these statements appreciate a Certified Accountant’ role in their creation.
As Certified Accountants, we have professional standards that we must follow when we are associated with a financial statement of one of our clients. Consequently, readers will typically place more faith in them than those that are produced by management. Under professional standards, we have three levels of “unaudited” services that we can provide.
Reviewed financial statements will have been subjected to a series of analytical procedures and inquiries of management. The statements will be comprehensive with full disclosures. Our report will state that the procedures are considerably less than an audit. Our workpapers will fully document all of the procedures and inquiries performed.
Compiled financial statements will have been prepared by us given our knowledge of the company and its industry. The statements may or may not be comprehensive with all disclosures. Anything omitted will be described in our report. We will read the statements (as a knowledgeable professional) and will pursue anything that looks unusual to us. Otherwise, we perform very little analytical procedures or inquiries to management. Our report will state that we did not audit or review the financial statements.
"Plain paper" financial statements are essentially compilations that do not include a report from us. They may only be provided to management with no further distribution allowed.