Almost every organization, whether it’s a privately held business, a publicly owned corporation, or a nonprofit organization, must prepare reports on its financial performance. Such reports help owners and managers make operating decisions, enable creditors to evaluate loan applications, and provide individuals with information to make investment decisions. These reports are normally financial statements.
The accounting profession recognizes that different entities have different accounting needs. To acknowledge these differences, the profession has developed standards that enable CPAs to offer a range of financial statement services; each designed to meet a different need. They are: Compilations, Reviews and Audits.