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compiled and reviewed financials for year end businesses

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#1
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DC Metro
Pros,

I am curious what you do here. We have clients who need compiled and reviewed financials done for third parties such as bankers. They are calendar year end companies. The clients usually dont get the books closed until end of January or Mid February for previous year end. By then, we are getting deep into the tax season. Do you tell these clients we need to extend, and get it done after 4/15, or get it done during the tax season? Thank you.
 

#2
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30-May-2014 1:43pm
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MA
Most clients in that situation we would get the corporate tax returns by the March 15 deadline(assuming S Corp or partnership)and start working on the financial statements at the end of April and into May. Since most CPA's firms are in the same boat, I do not think it should be too much of an issue.

One thing I have noticed is that every C corporation we have is now put on extension with the new April 15 deadline. It has just worked out that way. But 95% of our corporations are S Corps so we are only talking about a handful of C Corps
 

#3
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Thank you Berkshire. The issue we have here is we do the compiled or review first, and then do the tax return so these two match up. Do you do it the other way?
 

#4
sjrcpa  
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We get very few comp, review and audit engagements completed during tax season. Therefore the business' tax returns are extended.
 

#5
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Hilton Head Island, SC
I no longer do compilations and have never done reviews/audits--prepared financials only--but I would extend and compile/review the financial statements, first. Otherwise, you are potentially looking at unnecessarily amending a return.

Even for prepared financial statement engagements, I will not prepare the return until the financials are complete. Accordingly, the returns are extended.
 

#6
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Thank you pros. While we are speaking about this. How long in hours does it take you on average to prepare a compilation with notes and a review with notes?
 

#7
Doug M  
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A word of caution. Doing a compilation with footnotes puts you, as a preparer, at a lot of risk. If you are doing footnotes, add the analytical review and prepare a reviewed financial statements.
 

#8
novacpa  
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Arlington, Virginia
wwwcpa1biz wrote:Thank you pros. While we are speaking about this. How long in hours does it take you on average to prepare a compilation with notes and a review with notes?


If you have an Office in Virginia and have a Virginia CPA License - you also need a "firm license" (peer reviewed) to
issue assurance opinions on Compiled or Reviewed Financial Statements, do you have that?
I do know if having a DC CPA license requires a "peer review".
 

#9
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Hilton Head Island, SC
Most states I have looked at have the firm registration/license and peer review requirements under this scenario. SC certainly does.
 


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