Financial Statements

Your Bank Asked for Financial Statements. Here's What That Actually Means.

When a lender, bonding company, or buyer asks for financial statements, they're usually asking for something specific — and handing over the wrong type can slow down your loan, your bond, or your deal. We help Oregon business owners figure out exactly what's being asked for, prepare the right engagement, and get it done by a CPA who can actually sign off.

The Three Levels of Financial Statements — and Why the Difference Matters

Most business owners don't spend a lot of time thinking about the difference between a compilation, a review, and an audit. Until someone asks for one. Here's how the three levels break down:

 

  • Compilation: We take your financial data, organize it into properly formatted statements, and present it under our name. There's no testing of the numbers and no assurance that they're accurate — but the statements are prepared by a licensed CPA and formatted to professional standards. Banks and lenders often accept a compilation for smaller loans or routine financing requests.
  • Review: A step up. We perform analytical procedures and make inquiries about your financial information, then provide limited assurance that the statements are free from material misstatement. Reviews are commonly required for larger loans, lines of credit, bonding, or when an investor or buyer wants more than a compilation provides.
  • Audit: The most extensive level — independent verification of your financial records with the highest level of assurance. We don't perform audits, but we refer clients to trusted firms when one is required.

 

The right level depends entirely on what's being asked for. Bring us the bank's letter or the lender's requirement, and we'll tell you which engagement fits.

Which One Does Your Situation Call For?

Different situations call for different levels of assurance. Here's a practical guide:

 

  • Small business loan or SBA financing: Lenders frequently accept compiled financial statements for smaller loan amounts, particularly when the business has a straightforward structure and clean books.
  • Larger line of credit or commercial real estate financing: Banks and credit unions often require reviewed financial statements once loan amounts cross a threshold — typically in the range of $250,000 to $1 million, though this varies by lender.
  • Bonding or contractor licensing: Bonding companies regularly require reviewed financial statements to assess the financial health of a contracting business before issuing a bond.
  • Investor or partner due diligence: A prospective investor or incoming partner may request reviewed statements to get limited assurance on your numbers before committing.
  • Business sale: A buyer or their advisors may require reviewed — or in some cases audited — statements as part of the transaction process.

 

If you're not sure what level you need, you don't have to figure it out alone. We read lender requirements and bonding letters regularly — we know what they're asking for.

A Licensed Oregon CPA Who Can Actually Deliver These

Here's something worth knowing: many virtual, out-of-state CPA firms that market to Oregon businesses cannot prepare compilations or reviews for Oregon entities. Providing assurance-adjacent services for an Oregon company requires an Oregon-licensed CPA, and a number of online firms are upfront that they don't offer these services at all.

 

We do. Robert D. Russell, CPA PC is an Oregon-licensed firm that has been preparing compilations and reviews for Oregon businesses since 1988. When your lender or bonding company needs a signed engagement from a licensed CPA, we can deliver it — not refer you somewhere else at the moment you need it most.

What We Need From You to Get Started

Getting your financial statements prepared doesn't have to be complicated. The process generally works like this:

 

Step 1: Share the Requirement

 

Bring us the lender's letter, the bonding company's request, or whatever document specifies what's needed. We'll confirm the level of engagement required and make sure we're preparing exactly what will be accepted.

 

Step 2: Provide Your Financial Records

 

We'll let you know what we need — typically your general ledger, bank statements, and any supporting documentation. If your books are handled through our bookkeeping service, this step is already done.

 

Step 3: We Prepare the Statements

 

We organize, format, and prepare the engagement to professional standards. For a review, we'll perform the required analytical procedures and inquiries. For a compilation, we'll present your statements in proper form under our firm's name.

 

Step 4: Delivery and Sign-Off

 

We deliver the completed financial statements, signed by a licensed Oregon CPA, ready to submit to your lender, bonding company, or whoever requested them.

Common FAQs

Common Questions About Financial Statements

  • What's the difference between a compilation and a review?

    A compilation organizes your financial data into properly formatted statements prepared by a CPA — there's no testing or assurance involved. A review goes further: we perform analytical procedures and inquiries and provide limited assurance that the statements are free from material misstatement. Lenders and bonding companies typically specify which level they require.

  • Do I need an audit, or will a review be enough?

    Most small and mid-sized business financing requests, bonding requirements, and investor situations are satisfied with a review or a compilation. A full audit — with independent verification and the highest level of assurance — is typically required only for larger transactions, public companies, or specific regulatory situations. We'll tell you honestly which level your situation calls for, and if an audit is genuinely required, we'll refer you to a firm that performs them.

  • Can an out-of-state CPA prepare financial statements for my Oregon business?

    Many cannot. Compilations and reviews are assurance-adjacent services that require a CPA licensed in the state where the client operates. A number of virtual, out-of-state firms that market to Oregon businesses explicitly state they don't offer these services for Oregon entities. We're an Oregon-licensed firm, so we can.

  • How long does it take to get financial statements prepared?

    Timing depends on the complexity of your business and how current your books are. A straightforward compilation for a small business with clean records can often be completed in one to two weeks. A review typically takes a bit longer due to the additional procedures involved. If you're working against a lender deadline, let us know upfront and we'll do what we can to accommodate it.

We’re here to help.