Audit, Review, and Compilation Services for Schaumburg Area Businesses: Which One Do You Need?

If your lender is asking for audited financials, or a potential investor wants to see reviewed statements, or you simply need professionally prepared financial statements for a loan application, you need assurance services. But knowing which type of assurance service is right for your situation can be confusing, especially if you haven’t needed one before.

CJG Partners is a Schaumburg-based CPA firm that provides audit, review, and compilation services for closely-held businesses throughout the Chicago area. Here’s a simple breakdown of what each service involves, who typically needs it, and what to expect from the process.

What are assurance services and why do businesses need them?

Assurance services are professional CPA services that provide independent verification or examination of a company’s financial statements. They exist because lenders, investors, bonding companies, and other outside stakeholders can’t simply take a business owner’s word for the accuracy of their financials. They need a credentialed third party to review, test, or verify the numbers.

For small and mid-market businesses in Schaumburg and the Chicago suburbs, the most common triggers for needing assurance services include:

• A bank or lender requiring reviewed or audited financial statements as a condition of a loan
• Bonding requirements for contractors and construction companies
• Nonprofit organizations required to obtain an annual audit
• Investors or buyers conducting due diligence on a business
• Employee benefit plans (401k plans) subject to federal audit requirements
• Grant requirements for government or foundation funding

The level of assurance required depends on who’s asking and what they need. CJG offers all three levels–compilation, review, and audit–so we can match the right service to your specific situation.

What is a financial statement compilation?

A compilation is the most basic level of CPA financial statement service. Our CPAs take your financial information and present it in a properly formatted, professionally organized set of financial statements without performing analysis or providing any assurance that the numbers are accurate.

Compilations are a good fit for businesses that need financial statements prepared by a CPA for basic reporting, internal use, or when a lender or partner requires CPA involvement but doesn’t mandate a higher level of assurance. They’re the most cost-effective option and are often used by smaller businesses or companies in the early stages of growth.

What is a financial statement review?

A review provides limited assurance that your financial statements are free from material misstatement. Our CPAs perform analytical procedures, examine year-over-year changes, and investigate areas of concern. Then we issue a formal report that can be shared with banks, investors, and other stakeholders.

Reviews are among the most common assurance services for small- and mid-market businesses in the Chicago area, particularly for companies that carry bank debt or are seeking new financing. If your lender requires reviewed financial statements for a line of credit or commercial loan, a review from a CPA firm meets that requirement while being more cost-effective than a full audit.

A review also provides real value beyond compliance. The process often surfaces insights into your business performance and financial controls that you can act on.

What is a financial statement audit?

An audit provides the highest level of assurance available for financial statements. Our CPAs rigorously examine your financial records, test internal controls, and evaluate significant business areas to provide reasonable assurance that your statements are free from material misstatement.

Audits are required in some specific situations:

401(k) plan audits

Employee benefit plans with 100 or more eligible participants are generally required by the Department of Labor to have an annual audit. CJG Partners is a member of the AICPA Employee Benefit Plan Audit Quality Center, which reflects our commitment to quality and compliance in this specialized area.

Nonprofit audits

Many nonprofits are required to undergo an annual audit based on their revenue thresholds or grant requirements. CJG is also a member of the AICPA Governmental Audit Quality Center.

Bank and lender requirements

Larger loan facilities or more complex credit arrangements often require audited financials rather than reviewed statements.

Attestation services

For businesses subject to industry-specific regulations, our attestation services examine operational practices, documentation, and controls to identify compliance gaps and reduce regulatory risk.

Which assurance service does your business need?

Which level of service do you need? The answer usually comes down to who’s asking and what they require. Here’s a quick way to think about it:

• Need statements prepared by a CPA with no verification required? That’s a compilation.
• Does a lender or investor need limited assurance and a formal CPA report? That’s a review.
• Does a bank, regulator, benefit plan, or nonprofit require the highest level of assurance? That’s an audit.

If you’re unsure, we can help you figure it out. In many cases, we’ve helped businesses in Schaumburg, Naperville, Palatine, Elk Grove Village, Barrington, and across the Chicago suburbs identify exactly what their lender or stakeholder requires and deliver it efficiently.

Work with a Schaumburg CPA firm that specializes in Assurance

CJG Partners has been providing audit, review, and compilation services to closely-held businesses in the Chicago area for more than 40 years. Our memberships in the AICPA Employee Benefit Plan Audit Quality Center and the AICPA Governmental Audit Quality Center reflect the standards to which we hold our assurance work.

If you need financial statement assurance services for a loan, a regulatory requirement, or stakeholder confidence, reach out to our office in Schaumburg to talk through what’s right for your situation.