The accountant acknowledges to degrees varying based upon the level of evaluation they are asked to apply, the reasonableness of those numbers and disclosures. Those variations range from certifying that the numbers and disclosures are materially correct, down to simply presenting the client’s information.   As you read the financial statement report, look for the highlighting of the level of service.  It may be an examination (a certification), review, or compilation (presenting client information).   The variation can be substantial. For an examination, the Certified Public Accountant accepts responsibility of the accuracy of the amounts and disclosures.  For a compilation, if the client said the sky is purple, the accountant can present that in the financial statements, even though we all know that is not the color we see.

Many lenders require an examination but that is not always the case.  In instances where there is a small entity with a long term working relationship with the lender, a lower level of accountant service may be accepted, to save the borrower money.  If you are relying on a set of Financial statements, we suggest you tread lightly if they are not an examination.