Financial Statement Review Services
Reliable Financial Statements Begin With Reliable Accounting
Financial statements are among the most important management tools a business possesses.
Business owners use them to evaluate profitability, monitor cash flow, obtain financing, prepare tax returns, compensate employees, negotiate with investors, and make strategic decisions.
Unfortunately, financial statements are only as reliable as the accounting records used to prepare them.
Many businesses receive monthly Profit & Loss Statements and Balance Sheets without knowing whether the underlying accounting is accurate.
At Polaris Tax & Accounting, our Financial Statement Review Services help businesses determine whether their financial reporting can be relied upon and identify accounting issues before they become larger business problems.
Quick Answer
Financial Statement Review Services evaluate the consistency, accuracy, and reliability of management financial reports by reviewing key accounting balances, reconciliations, reporting trends, and supporting records. The objective is to identify material accounting issues that may affect business decisions, tax reporting, financing, and long-term financial planning.
Why Accurate Financial Statements Matter
Financial statements are used every day to answer important business questions.
Can we afford to hire another employee?
Is the business profitable?
Should we purchase new equipment?
Can we qualify for financing?
How much cash is actually available?
Are expenses increasing faster than revenue?
If the financial statements are inaccurate, every decision based upon those reports becomes less reliable.
Financial Statement Review helps identify accounting weaknesses before they affect management decisions.
What We Review
| Financial Reporting Area | Review Objective |
|---|---|
| Balance Sheet | Evaluate assets, liabilities, debt, equity, and unsupported balances. |
| Profit & Loss Statement | Review classifications, trends, gross margins, and unusual fluctuations. |
| Cash Accounts | Confirm reconciliations and reported balances. |
| Loan Accounts | Verify principal balances and interest treatment. |
| Payroll Accounts | Review payroll liabilities and expense reporting. |
| Accounts Receivable | Evaluate aging, collectability, and unusual balances. |
| Accounts Payable | Identify duplicate, negative, or unsupported liabilities. |
| Owner Equity | Review distributions, contributions, and retained earnings activity. |
Common Problems We Identify
- Financial statements that change after month-end.
- Bank balances that do not reconcile.
- Unsupported Balance Sheet accounts.
- Incorrect loan balances.
- Payroll liabilities that remain after payment.
- Duplicate or unsupported journal entries.
- Revenue and expense classifications that distort profitability.
- Negative asset or liability balances.
- Opening Balance Equity remaining on the books.
- Retained earnings balances that cannot be explained.
Financial Statement Review Is Not an Audit
Our Financial Statement Review Services are management advisory services and should not be confused with an audit, review, or compilation engagement performed under professional attestation standards.
We do not express an audit opinion or provide assurance on the financial statements.
Instead, we review the accounting records from a management perspective to identify material reporting concerns, accounting inconsistencies, and opportunities to improve financial reporting quality.
Who Benefits From Financial Statement Review?
- Businesses preparing for financing.
- Companies seeking investors.
- Businesses changing accountants.
- Companies that recently completed an Accounting Recovery engagement.
- Organizations with internal accounting staff.
- Businesses using outsourced bookkeeping.
- Companies experiencing rapid growth.
- Owners who simply want greater confidence in their financial reporting.
Financial Statement Review vs. Accounting Recovery
| Accounting Recovery | Financial Statement Review |
|---|---|
| Corrects historical accounting problems. | Evaluates the quality of financial reporting. |
| Rebuilds accounting records. | Reviews completed accounting work. |
| Project-based reconstruction. | Periodic or recurring oversight. |
| Focuses on restoring accounting integrity. | Focuses on validating financial reporting. |
If significant accounting problems are identified during a Financial Statement Review, we may recommend an
Accounting Recovery
engagement before recurring review services continue.
Financial Statement Review vs. Controller Review
| Financial Statement Review | Controller Review |
|---|---|
| Focuses primarily on the reports. | Reviews the reports and the underlying accounting process. |
| Identifies reporting concerns. | Provides broader accounting oversight. |
| May be performed periodically. | Often becomes part of recurring financial oversight. |
Our Review Process
- Perform an Accounting Diagnostic™ when appropriate.
- Review Balance Sheet integrity.
- Analyze Profit & Loss reporting.
- Evaluate reconciliations.
- Review unusual transactions and journal entries.
- Identify material reporting concerns.
- Provide recommendations for improving financial reporting reliability.
Frequently Asked Questions
Can you tell me if my financial statements are accurate?
We evaluate the reliability and consistency of the financial reporting based on the agreed scope of the engagement. This service is not an audit and does not provide absolute assurance.
Will you correct accounting problems?
Minor issues may be addressed depending on the engagement. Significant historical accounting corrections are typically handled through a separate
Accounting Recovery
engagement.
How often should financial statements be reviewed?
Many businesses benefit from monthly or quarterly reviews, although the appropriate frequency depends on the size and complexity of the business.
Can this service help before applying for a loan?
Yes. Reviewing financial statements before submitting them to a lender can identify accounting issues that should be addressed first. However, no financing outcome can be guaranteed.
Do I need this if my CPA prepares my taxes?
Tax preparation and Financial Statement Review serve different purposes. A tax return reports taxable income, while Financial Statement Review evaluates the quality and reliability of management reporting used throughout the year.
Build Confidence in Your Financial Reporting
Reliable financial statements help businesses make better decisions.
If you question whether your Balance Sheet, Profit & Loss Statement, or supporting accounting records accurately reflect your business, the first step is understanding the condition of the underlying accounting.
Our Financial Statement Review Services provide independent financial oversight designed to improve reporting quality and identify accounting concerns before they become larger operational or tax issues.