Review (Limited Assurance)- An annual review of financial statements consists of numerous analytical procedures and management inquiries. Most states require either a review or an audit for established NFPs. Moreover, a review is the most expedient option for management or those charged with governance to satisfy their ongoing fiduciary responsibilities of engendering trust, accountability, oversight, and transparency. Similar to an audit, the independent CPA provides a report, which communicates a level of assurance that the financial statements are not misleading. The review service is normally conducted in conjunction with preparation and filing of Form 990.
Compilation (Lowest Level of Assurance)- This service consists of compiling financial statements by utilizing U.S. Accounting Standards, knowledge of the organization, and management's representations. Banks often require a compilation report from an independent CPA to comply with bank covenants. The compilation service is normally conducted in conjunction with preparation and filing of Form 990.
Financial Statement Preparation- Unaudited financial statements are prepared by the CPA in conjunction with preparation and filing of Form 990. This service is similar to the compilation service, but excludes the official reporting by the CPA. Therefore, an assessment is conducted at the onset and the most appropriate service is recommended.
Form 990 Preparation and Filing- Established NFPs are required to file Form 990 on an annual basis. Normally, this service is provided in conjunction with a review, compilation, or financial statement preparation.