Why are there different levels of financial statements?
The different levels of financial statements reflect the different needs and uses for financial information. Compilation level statements are used for nearly all interim reporting purposes, to present annual statements for closely held organisations and as the basis for tax returns or other similar government reporting purposes. Except as noted above, Compilation level statements are not suitable for third party reporting purposes such as reporting to your banker, funding agencies or prospective purchasers. In fact, Compilation level statements contain a notice that specifically restricts you from distributing the statements to any third party without written permission from our accounting firm. Review level statements are used for all of the purposes noted above and are also used for third party reporting purposes that do not include reporting to the general public. Audit level statements are suitable for any circumstance in which financial information might be needed.
