October 8, 2025
At Larson and Company, our CPAs frequently conduct financial statement reviews for various industries, including construction companies. A review is a report that accompanies a set of financial statements issued by a CPA. For such reviews, the CPA performs only analytical procedures and inquiries of management but does not test internal controls or verify balances through substantive procedures such as verifying balances with third-parties or examining supporting documents. As a result, a review provides only limited assurance that the financial statements are free from material misstatement and is significant less in its level of assurance than an audit.
Many clients ask what a review entails and how they can best prepare for it. This article outlines the key phases of the review process and offers practical tips to ensure a smooth and efficient experience.
Information Gathering
The first step is collecting all necessary documentation to support the financial statements and footnotes. This typically includes:
Tip: Larson and Company will provide a secure document portal with specific requests tailored to your engagement. Simply focus on maintaining updated supporting documents and fulfill all the related requests to streamline this step.
Analytical Procedures and Inquiries
Once the data is gathered, we perform analytics and ask targeted questions to understand your financial trends and anomalies. This includes:
Tip: Be ready to explain changes in revenue, margins, or expenses. Having internal reports or job cost summaries can be helpful.
Preparation of Financial Statements
After analysis, we can help prepare the financial statements and footnotes in accordance with applicable accounting standards. This includes:
Tip: Review CPA prepared financial statements to ensure all related footnotes and classification of balances are presented accurately. Clear communication about new contracts, leases, or financing arrangements is also a key to the accuracy of the financials.
A typical review engagement takes 1–3 weeks, depending on how quickly the requested information is provided. Delays in gathering documents or responding to inquiries can extend the timeline.
If you’d like to learn more or have questions about preparing for a review, consult with a Larson accounting expert. We’re here to help make the process as smooth and insightful as possible. Larson and Company has developed a suite of services specifically to serve the needs of companies of all sizes in a wide range of industries.