Glossary
Reviewed financial statements
What reviewed financial statements are, how a review differs from an audit, and when a Reg CF offering requires them.
Reviewed financial statements are statements an independent accountant has examined through inquiry and analytical procedures, without the testing an audit involves. The accountant's report says whether anything came to their attention suggesting the statements need material changes. A review gives limited assurance, costs a fraction of an audit, and usually takes weeks rather than months.
When Reg CF requires them
Under 17 CFR 227.201(t), a Reg CF offering needs reviewed statements when the offering amount, together with Reg CF sales in the prior 12 months, is more than $124,000 and not more than $618,000. A company that has never sold under Reg CF may also use reviewed statements up to $1,235,000. If the company will accept more than its target, the maximum it will accept is the amount that counts. The review report must not be modified, and if audited statements are available they must be used instead.
Further reading
- Choosing an exemption by how much you need to raise
- Reg CF limits, explained
This page is general information about securities rules, not legal advice. Which statements a particular offering needs is a question for counsel and the company's accountant.