Reg CF Audits & Reviews
dbbmckennon provides independent audit and financial statement review services for companies raising capital under Regulation Crowdfunding (Reg CF). We work with issuers that need to satisfy applicable financial statement requirements while keeping the process practical, responsive, and coordinated with the broader offering timeline.
Our experience with emerging-growth companies and capital-raising transactions helps us understand the timing and reporting issues that can become important in a Reg CF offering.
Audit and Review Services for Regulation Crowdfunding
Regulation Crowdfunding can require reviewed or audited financial statements depending on the amount being raised and the issuer’s circumstances.
dbbmckennon performs the independent review and audit procedures required for Reg CF offerings and works with management and securities counsel to coordinate financial statement timing and related reporting needs.
Experience With Emerging-Growth Companies
Many Reg CF issuers are early-stage or growing companies with evolving operations, financing structures, and accounting issues.
Common areas that may require attention include:
Revenue recognition
Equity and stock-based compensation
Convertible instruments and SAFEs
Related-party transactions
Debt and financing arrangements
Going concern considerations
Financial statement presentation and disclosures
Our team focuses on identifying audit and review issues early and communicating clearly throughout the engagement.
Reviews Versus Audits
A financial statement review provides limited assurance and involves substantially less work than an audit. An audit provides a higher level of assurance and requires more extensive procedures.
The level of service required for a Reg CF offering depends on the applicable offering and financial statement requirements.
We can help determine whether the engagement requires a review or an audit based on the reporting framework applicable to the offering, while remaining within our role as the independent accountant.
Why Reg CF Issuers Choose dbbmckennon
Regulation Crowdfunding Experience
Reg CF is a specialized area of our practice, and we understand the financial statement requirements and timing considerations that accompany these offerings. When Reg CF went live in May 2016, dbbmckennon handled a significant portion of all audit and review work nationally for companies undertaking this line of fundraising; working with all the major funding portals. Since that time, we have continued to support companies undertaking Reg CF, focusing on high-impact or growing companies.
Emerging-Growth Company Focus
We regularly work with growing companies that may have limited accounting infrastructure but increasingly complex reporting requirements.
Responsive Communication
Capital raises can move quickly. We emphasize communication and coordination so issues can be identified early and the financial statement process stays on track.
Partner Involvement
Our partners remain involved throughout the engagement and are accessible when significant accounting, review, or audit matters arise.
Frequently Asked Questions
Does a Regulation Crowdfunding offering require audited financial statements?
Not always. Depending on the amount being raised and the issuer’s circumstances, a Reg CF offering may require financial statements that are management certified or reviewed or audited by an independent CPA firm.
What is the difference between a Reg CF review and audit?
A review provides limited assurance and generally involves inquiry and analytical procedures. An audit provides a higher level of assurance and includes more extensive testing and audit procedures.
Can dbbmckennon perform both Reg CF reviews and audits?
Yes. We provide both financial statement reviews and audits for companies raising capital under Regulation Crowdfunding, depending on the applicable requirements.
When should a Reg CF issuer engage an accountant?
Ideally, the accountant should be engaged early enough to determine the applicable financial statement requirement and complete the review or audit without delaying the offering.
Does dbbmckennon work with companies that later raise capital through other exemptions or go public?
Yes. We work with emerging-growth companies across different stages of capital raising, including issuers that may later pursue Regulation A, private financing, or public-market transactions. One of the key considerations when discussing services with a client, is to understand their long-term objectives and plans. Services that are allowed for a private company undertaking Reg CF, may not be allowed for Regulation A or public companies. Often times, not planning for these long-term transitions can cause issue with independence.
can dbbmckennon prepare my financial statements for a reg cf filing?
Yes. Under AICPA standards, a CPA firm can prepare financial statements and footnotes for a company undertaking Reg CF. However, someone from management with adequate knowledge, skill and experience needs to take reasonability for such work to be compliant. As discussed above, these non-attest services may impair independence if a Company later undertakes a Regulation A offering or go-public transaction.
Talk With an Audit Partner
If your company is preparing a Regulation Crowdfunding offering and needs reviewed or audited financial statements, we would be glad to discuss the applicable requirements and timing.