Certified Public Accountant
Certified Valuation Analyst
Certified Financial Planner

1319 W. Baseline Rd, Suite 201
Lafayette, CO 80026
Tel: 303-530-4650
Fax: 303-530-4971
Financial Statements
Preparing financial statements is the starting point for having meaningful information with which to make management decisions to run a business. This process consists of compiling activity by account and preparing adjusting entries. This process can be done monthly, quarterly or at year-end, depending on a client’s need for reporting. We service a broad range of business clients and can provide formal financial statements or simply provide an adjusted trial balance that can be used for tax or other client reporting.
CPA’s must comply with professional standards which dictate certain procedures for preparing financial statement.  These standards allow CPA's to provide three distinct levels of financial statement, which are compiled, reviewed, or audited financial statements.   There are some limited exceptions that do allow CPA's to provide less formal financials if the client requests them.

As a member of the AICPA and the Colorado Society of CPA’s, the firm of Brad Borncamp, CPA, LLC is required to periodically submit samples of our work on financial statement preparation for peer review and we have consistently achieved the highest marks available.  The results of our peer reviews are published on the AICPA website, and we have consistently received favorable reviews.

We offer advice to clients on which level of service is appropriate in each case. This may result in providing an adjusted trial balance instead of preparing formal financial statements, which can lower our fees and still meet the needs of the client.

We offer advise on which accounting method, such as cash or accrual, is appropriate for each business, and how the method effects the reporting of your business operations.

We can provide monthly, quarterly, or year-end financial statements as needed. The state-of-the-art accounting software used in our office allows us to show comparisons and calculations for effective, practical business analysis.. These financial statements can also be used as a basis for preparing annual income tax returns.  See the information below for more details.

Types of Financial Statements

There are three types of financial statements that can be issued by a Certified Public Accountant (CPA), these are compilation, review, and audit.  A CPA is governed by the professional standards issued by the American Institute of Certified Public Accountants and must follow certain guidelines when issuing financial statements.  Among other things, these guidelines include issuing an accountant’s report to describe the level of the financial statements and to identify any disclosure issues.  Each level requires a different amount of information about the reporting entity and the related activity.  These levels are summarized below.

   • Compilation:
The lowest level, must disclose the accounting method used but gives no assurances, this can be with or without footnote disclosures.

   • Review:
The next level, includes limited assurance there are no major issues, must include footnote disclosures.

   • Audit:
The highest level, includes the CPA's opinion on compliance with accounting standards, must include footnote disclosures.

What Information is Needed

Financial statements reflect financial information from the accounting records and the footnotes reflect information about the business activity.  Once the bookkeeping is done and the necessary adjustments have been made, the financial statements can be prepared.  Depending on the level of statements required, some or all of the following information will be needed.

•  An understanding of the reporting entity
•  List of all insurance policies and coverage
•  An unadjusted trial balance for the period
•  List of all leases and their terms
•  List of depreciable assets and their depreciation
•  List of all loans and their terms
•  Descriptions of any investments
•  List of owners and related interests
•  Any other relevant information

Steps Involved

The steps involved in preparing financial depends on the level of statements required and may be different for each company.  However, every level starts with an adjusted trial balance, which is either provided by the company or prepared by the CPA.  An adjusted trial balance is a list of the account balances shown in the general ledger of the company, after adjustments for year end items such as inventory and depreciation.  The general ledger is that part of the bookkeeping system used to accumulate the transactions for each account.

The steps involved vary for each company and should be discussed with the client before the CPA starts to prepare the financial statements.  These discussions are required by the CPA professional standards and usually involve the CPA gaining an understanding of the client’s business and who will use the statements.  The usually involves discussing who will do the work to develop the adjusted trial balance and who will compile any other information required for the level of statements needed.  During this process the period(s) to be reported and the timing of when the statements must be finished will be established.  It may also include discussing the company’s internal controls and compliance with related laws and regulations.  This process can be very detailed depending on the activity being reported and the condition of the company’s bookkeeping systems and overall financial stability.

Financial Statement Services

Financial statement reporting is the last step in the bookkeeping process.  However, it is the first step in gaining insight into the results of operations which management must have to make informed decisions.  In addition to providing management with vital financial information, financial statements may be required by banks and other outside creditors and investors.

It is important to identify the level of financial statements needed.  There is no point in having an audit done when you can get by with a review or a compilation.  It is a good idea to discuss reporting requirements with any outside creditors to match the statements to their needs.  It will lower your accounting costs if they will accept a lower level of statement reporting.

The firm of Brad Borncamp, CPA, LLC provides fee based services, including accounting, tax planning and preparation, business valuation, and estate, gift, and financial planning.  We work with each client to identify the level of service needed to help achieve their goals.  We have the knowledge and tools to prepare comprehensive financial statements, set up accounting systems, and advise management on internal controls. We do not sell insurance, investments, or any other commissioned products.  This way you get professional, objective advice before meeting with the other advisors on your team.

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