Financial Statement Audit
An audit is a thorough examination of a company’s financial statements, including tests of controls and underlying records. Annual audits are required for public companies and must also be included with registration statements filed with the SEC (Form S-1, Form 1-A).
Annual audits may be required highly regulated activities, such as Money Service Business operations, or for companies subject to the requirement to maintain a so-called “Bitlicense” in the State of New York. Audits may also be required for certain SEC Regulation CF (JOBS Act Title III) offerings.
Financial Statement Review
A review engagement consists primarily of analytical procedures we apply to the financial statements and inquiries of management. Reviews are required for Regulation CF offerings that exceed $250k.
Quarterly financial statement reviews are required by the SEC for most public companies.
Financial Statement Compilation
A compilation, also known as a “write up,” is an engagement performed with the objective of presenting information provided by a company’s management in a manner consistent with Generally Accepted Accounting Principles. Companies subject to the annual reporting requirements of Regulation CF must present prepared (but not compiled) GAAP basis financial statements with their annual report.
Which Report Do You Need?
SEC rules allow equity crowdfund offerings to proceed with management-certified financial statements. However, at least one study of the equity crowdfund market suggests that companies with financial statements that have been audited or reviewed by a public accounting firm are “more likely to reach their target capital, attract a greater number of investors, and raise more capital relative to firms that only provide management-certified financial statements.”
Jason also provides business consulting services to companies and entrepreneurs in the start-up and early growth phases of development.
Contact us to schedule a consultation to discuss your situation and put a plan together that supports all your needs.