What an audit asks the bank
An audit often asks the bank, in writing, to confirm the cash. It asks customers about what they owe you. It asks for counts of what is on the floor. The point is evidence that did not come only from you. That is why the calendar for an audit is long, and why a Friday request for an audit by Monday is not a plan.
What a review asks instead
A review asks the statements to make sense. Margins that fell off a cliff need a story. Cash that does not match the profit needs a bridge. The signer inquires and reads. The signer does not, in a review, do the confirmations that make an audit an audit. If your letter says review and then describes confirms and samples, the letter may mean audit and should be read again.
Why compilation stays a third word
A compilation does not sit halfway between the other two. It says the numbers were not audited and not reviewed. Putting it in the middle of a slider is how people get hurt. If a form offers three boxes, tick the box the sender named, then read the report that box produces.
We can prepare the statements underneath any of the three. Preparation is not the report. The report is the page with the signature and the warning. We do not sign that page.
How to answer a sender who used both words
Quote their sentence back. Ask which report they will accept if the year is closed and the statements are ready but unsigned by a firm. Ask whether a review from a firm that can sign it meets the file, or whether they wrote audit out of habit. People who hold the loan can usually answer. Templates cannot.
While they answer, we can still close the months. A waiting year is not a strategy. The side-by-side decision is faster when the numbers are already true.
The Globe-News Center is the hall in Amarillo where a piano can sit alone on a lit stage. Owners already point to that hall when they say which side of downtown they mean. We have not bought a ticket there. The month a ticket is dated still closes on the day we set, by video. The two reports are still the subject. The hall is how this page stays in this city.
The fuller plain-English set, including compilation's own section, is on the three report words.
A practical way to read the two reports without a textbook
Take last year's statements, even rough ones, and ask two questions out loud. Could a stranger confirm the cash with the bank, and did anyone? If the answer is yes and yes, you are in audit country, or you already paid for one. If the answer is that someone read the swings and asked you why payroll jumped in August, you are in review country. If the answer is that the numbers were arranged and nobody asked why, you are holding a compilation, whatever the cover says.
Owners in Amarillo hit this when a bonding agent and a banker use different words for the same year. Write both words down. Do not average them. We will read both sentences with you and say what each one requires from the books, and what each one requires from a signature that is not ours. The books can start this week. The signature, if it is truly required, starts when those books can stand a question. Cash a stranger confirmed with the bank is one ask. A swing somebody only read is another, and the Globe-News hall does not merge them.
