Financialstatement review is an important process that helps accountants andfinancial professionals in determining whether financial statementsconform to applicable reporting frameworks. The most common reportingframeworks used in the field of accounts include the IFRS and GAAP(CGA-New Brunswick, 2014). However, a review of financial statementsdoes not require the accountant to focus on details of fraud risk,internal control, and other audit procedures. This paper will providea review of the financial statements of Patton-Fuller, which is acommunity hospital located in Kelsey City. The paper will focus onthe difference between audited and unaudited financial statements andthe relationship between sources of revenue and expenses for thefinancial years 2008 and 2009.
Differencesbetween the audited and unaudited financial statements
Thereis a discrepancy of $ 1,000,000 in accounts receivable (patient) inthe balance sheet for the years 2009 and 2008. Unaudited statementshows that accounts receivable amounted to $ 59,787,000, while theaudited accounts indicate that the amount was $ 58,787,000. Thisaccounts for the difference of $ 1,000,000 in accounts receivable forthe year 2009 (Patton-Filler, 2011). The audited balance sheet showsa total amount of current assets to be $ 127,867 while unauditedbalance sheet indicates $ 128,867 for the years 2008. In addition,the audited balance sheet shows that the amount of total assets is $587,767 while an unaudited statement shows an amount of $ 588,767 forthe year 2009. The interest payable has been added to the totalassets for both years in unaudited accounts, while the same item hasbeen included in bonds payable in the audited balance sheet.
Thestatement of revenue and expenses also contained a discrepancy of $1,000,000, which was presented in the doubtful accounts. Unauditedstatements indicted $ 13,797,000, while the audited accountsindicated $ 14,797,000, accounting the difference of $ 1,000,000. Thenet income reported in the audited statements of 2009 amounted to $627,000, while unaudited accounts showed a net income of $ 373,000for the year 2009 (Patton-Filler, 2011).
CGA-NewBrunswick (2014). Whatare audit, review, and compilation?Moncton, NB: CGA-New Brunswick.
Patton-Filler(2011). Financialstatements.San Antonio, TX: Patton-Filler.