A number of our clients use compiled financial statements, and some maintain reviewed statements. That’s acceptable, but you’ll do much better with audited financial statements a year or two before you plan to sell.
With validated financial accuracy, buyer confidence is increased, you will experience shorter due diligence periods, and your company will be sold. I’ve had buyers tell me they’ve paid 0.25 to 0.5 more on deal multiples for a business with strong financial statements. As your business size grows, those quarter points can make a big difference in the purchase price and well outweigh the cost of an audit.
