Intro to Mortgage Origination Examinations Training - July 2025

Overview Certified Public Accountants (CPAs) offer three primary types of financial statement services— compilations, reviews, and audits—each designed to meet different levels of reporting needs and assurance. These services vary in terms of the procedures performed, the level of assurance provided, and their typical use cases. Compilation Definition An unaudited financial statement for which the financial data has been assembled by a CPA or equivalent but not reviewed for accuracy. For NMLS purposes, this is also referred to as an unaudited compiled financial statement. A compilation involves the CPA presenting financial information in the form of financial statements based solely on data provided by the company’s management. No assurance is given about the accuracy or completeness of the information. Key Features • Chapter 7: Liquidation bankruptcy where non-exempt assets may be sold to pay creditors. Most mortgage debts are discharged unless reaffirmed.\ • Assurance Level: None • Procedures: No analytical procedures or testing performed • Reliance on Management Data: 100% • GAAP Compliance: May follow GAAP format, but disclosures (e.g., footnotes) may be omitted • Use Cases: Internal reporting, informal reporting to investors or potential buyers, or where no third-party assurance is required • Cost & Time: Lowest cost and fastest to complete

Review

Definition An unaudited financial statement for which the financial data has been reviewed for accuracy by a CPA or equivalent. For NMLS purposes, this is also referred to as an unaudited reviewed financial statement. A review engagement provides limited assurance that the financial statements are free of material misstatement. It involves applying analytical procedures and making inquiries, but no detailed testing or external verification.

3 Understanding CPA Audit Report Types / Definitions & Key Features