Quick Answer
Tier 2 Reg A+ offerings need audited financials; Tier 1 generally does not. Form 1-A Part F/S requirements, auditor independence, the nine-month staleness rule, Form 1-K reporting, and how the audit calendar drives a launch.
A Reg A+ offering needs audited financial statements only in Tier 2; Tier 1 permits unaudited financial statements unless the issuer already has an audit that meets Regulation A's independence standards, in which case the audited version must be filed. Both tiers file financial statements in Part F/S of Form 1-A, and in both tiers the statements age out — once they pass the nine-month staleness window, the offering statement cannot be filed or qualified without updated interim financials.
For issuers, the audit question is less about compliance trivia and more about schedule. The audit is usually the longest lead-time item in a Reg A+ raise, and stale financials are one of the most common reasons a planned launch date slips. This guide covers what each tier requires, how the staleness clock works, what auditor independence means under Regulation A, and how the financial-statement calendar should drive the marketing calendar.
Reg A+ Financial Statement Requirements: Tier 1 vs Tier 2
Regulation A's two tiers are defined in Rule 251 (17 CFR 230.251): Tier 1 permits up to $20 million in a 12-month period and Tier 2 permits up to $75 million. The financial statement content itself is specified in Part F/S of Form 1-A, which the offering statement rule, Rule 252 (17 CFR 230.252), requires issuers to file.
| Requirement | Tier 1 | Tier 2 |
|---|---|---|
| Maximum raise (12 months) | $20 million | $75 million |
| Audit required in Form 1-A? | No, unless an independent audit already exists | Yes |
| Auditor independence standard | AICPA or SEC Regulation S-X Rule 2-01 (if audited) | AICPA or SEC Regulation S-X Rule 2-01 |
| PCAOB-registered auditor required? | No | No (changes if the issuer later registers under the Exchange Act) |
| Fiscal years covered | Two most recent fiscal years (or since inception) | Two most recent fiscal years (or since inception) |
| Accounting framework | US GAAP (IFRS as issued by the IASB for eligible Canadian foreign private issuers) | Same |
| Staleness window | Nine months from fiscal year end | Nine months from fiscal year end |
| Ongoing financial reporting | None; Form 1-Z exit report after the offering | Audited annual Form 1-K and semiannual Form 1-SA |
| State securities review | Yes, in each state where offered | Preempted for registration purposes |
The tier decision itself involves more than audit cost — state review, investor limits, and ongoing reporting all factor in. Our Reg A+ Tier 1 vs Tier 2 comparison covers those trade-offs side by side.
Tier 1: When Unaudited Financials Are Permitted
Tier 1 issuers may file financial statements that have not been audited. The exception that catches issuers off guard: if the company has already obtained an audit of those statements for another purpose — a bank covenant, an investor requirement, a prior financing — and the auditor meets Regulation A's independence standards, Part F/S requires the audited statements to be filed instead of the unaudited ones.
Unaudited does not mean informal. Tier 1 financial statements still follow US GAAP, still cover two fiscal years, and still get read by SEC staff and by state examiners. Because Tier 1 offerings are not preempted from state registration, each state where the offering is made can review the filing — and some state regulators may ask for audited statements as a condition of their review. Issuers weighing Tier 1 to avoid audit cost typically ask counsel how the states on their target list handle unaudited filings before committing.
Why the Tier 1 audit saving is often smaller than it looks
Tier 1 removes the audit requirement but adds state-by-state coordination, and it caps the raise at $20 million. Issuers expecting to return to the market — or to graduate to Tier 2 later — will need audited financials at that point anyway. Many issuers conclude the audit is a cost they will incur eventually, which narrows the practical gap between the tiers.
Tier 2: Audit Standards and Auditor Independence
Tier 2 offering statements must include audited financial statements. Regulation A gives issuers flexibility on who performs the audit and to which standards:
- Audit standards: the audit may be performed under US generally accepted auditing standards (AICPA) or under PCAOB standards.
- Independence: the auditor must be independent under either the AICPA's independence rules or Rule 2-01 of SEC Regulation S-X.
- PCAOB registration: the auditor does not need to be registered with the PCAOB for a Regulation A filing.
That last point matters for planning. If a Tier 2 issuer intends to list on a national securities exchange and register a class of securities under the Exchange Act — the path covered in our guide to Reg A+ Nasdaq and NYSE American listings via Form 8-A — Exchange Act reporting brings PCAOB-registered auditors and PCAOB standards into play. Issuers with a listing ambition often engage a PCAOB-registered firm from the start to avoid a re-audit later.
Consent of the certifying accountant
Rule 252 requires that every amendment to an offering statement that includes amended audited financial statements also include the consent of the certifying accountant to the use of its certification and to being named as having audited those statements. In practice, this means the auditor is involved in each amendment cycle that touches the financials — another reason to align the audit firm's availability with the expected SEC comment timeline.
The Nine-Month Staleness Rule
Part F/S sets an age limit on financial statements. The general rule: at both the filing date and the qualification date, the most recent balance sheet can be no more than nine months old. If an offering statement is filed or qualified more than nine months after the end of the most recently completed fiscal year, it must include interim financial statements covering at least the first six months of the current fiscal year. Those interim statements may be unaudited, even in Tier 2.
For a calendar-year issuer, the practical windows look like this:
| Filing or qualification date | Financial statements typically needed |
|---|---|
| Through September 30, Year 2 | Fiscal years ended December 31, Year 1 and Year 0 (audited for Tier 2), once Year 1 statements are complete |
| October 1 – December 31, Year 2 | Above, plus interim statements for the six months ended June 30, Year 2 (may be unaudited) |
| After Year 2 statements are complete | Fiscal years ended December 31, Year 2 and Year 1 (audited for Tier 2) |
Note that the test applies at qualification, not only at filing. An issuer that files in August with fiscal-year financials, then spends three months responding to SEC comments, can hit the staleness date before qualification and need to file an amendment with interim statements. Counsel and auditors typically map this calendar before the first filing. Our guide to how long Reg A+ SEC qualification takes covers the review timeline that interacts with this clock.
Ongoing Financial Reporting After Qualification
The audit obligation does not end at qualification for Tier 2 issuers. Rule 257 (17 CFR 230.257) sets out the periodic reporting regime:
- Annual report on Form 1-K: Tier 2 issuers file an annual report containing audited financial statements within the period Form 1-K specifies, 120 calendar days after fiscal year end.
- Semiannual report on Form 1-SA: covers the first six months of the fiscal year; the financial statements may be unaudited.
- Special financial report: if the qualified offering statement did not contain audited statements for the most recent fiscal year preceding the year of qualification, Rule 257(b)(2) requires a special report on Form 1-K within 120 calendar days after qualification. If it lacked first-half interim statements for an issuer qualified in the last six months of its fiscal year, a special report on Form 1-SA is due within 90 calendar days after qualification.
- Tier 1: no ongoing annual or semiannual reports; the issuer files a Form 1-Z exit report no later than 30 calendar days after the offering terminates or completes.
The full reporting calendar, including current reports on Form 1-U, is covered in our guide to Reg A+ ongoing reporting requirements.
How the Audit Calendar Should Drive the Marketing Calendar
The financial statements gate the filing, the filing gates qualification, and qualification gates sales. That chain makes the audit the first domino in a Reg A+ marketing plan. A practical sequence issuers use:
- Engage the auditor early. First-time audits of early-stage companies often surface clean-up work — revenue recognition, equity accounting for SAFEs and convertible notes, capitalized costs — that extends the timeline.
- Map the staleness dates. Identify the last realistic qualification date before fiscal-year statements go stale, and work backward to a filing date that leaves room for SEC comments.
- Use the waiting period for demand-building. Rule 255 (17 CFR 230.255) permits testing-the-waters solicitations of interest, subject to its legend and filing conditions. Building a reservation list while the audit and SEC review run means paid acquisition is not starting cold on qualification day.
- Keep marketing claims consistent with the audited numbers. Revenue, growth, and customer figures used in ads and landing pages should reconcile to the offering circular. A marketing claim that outruns the financial statements creates antifraud exposure and invites SEC comment.
- Plan for the annual refresh. Rule 252(f)(2) requires ongoing offerings to file a post-qualification amendment at least every 12 months after qualification to include the financial statements Form 1-A would then require. Sales under the amended statement generally wait for its qualification, so issuers budget ad spend around that window rather than through it.
Common financial-statement problems that delay launches
- Choosing a non-independent accountant (for example, one who also kept the books) and discovering the audit cannot be used.
- Filing late in the nine-month window with no buffer for SEC comments.
- Advertising metrics — annual recurring revenue, "bookings," pipeline — that do not appear in or reconcile to the financial statements.
- Assuming Tier 1 means no financial scrutiny, then facing state examiner requests.
Frequently Asked Questions
Do Tier 1 Reg A+ offerings require audited financial statements?
No, Tier 1 permits unaudited financial statements prepared under US GAAP. The exception is when the issuer has already obtained an audit of those statements from an independent auditor for another purpose; in that case, Form 1-A Part F/S requires the audited statements to be filed. State regulators reviewing a Tier 1 offering may also request additional financial information.
Does a Reg A+ Tier 2 auditor need to be PCAOB-registered?
No, Regulation A does not require PCAOB registration for the auditor of a Tier 2 offering statement. The auditor must be independent under either AICPA rules or Rule 2-01 of Regulation S-X, and the audit may follow AICPA or PCAOB standards. Issuers planning an exchange listing and Exchange Act registration often engage a PCAOB-registered firm from the outset.
How old can financial statements be in a Form 1-A filing?
The most recent balance sheet generally can be no more than nine months old at the filing date and at the qualification date. Beyond that point, the offering statement needs interim financial statements covering at least the first six months of the current fiscal year, which may be unaudited. The test at qualification means a long SEC review can push an issuer past the window.
How many years of financial statements does Reg A+ require?
Form 1-A Part F/S calls for balance sheets as of the two most recent fiscal year ends and income, cash flow, and stockholders' equity statements for each of those two fiscal years. A company that has existed for less than two years provides statements covering the period since inception. Interim statements are added when the staleness window requires them.
What ongoing audits does a Tier 2 Reg A+ issuer face?
Rule 257 requires Tier 2 issuers to file an annual report on Form 1-K with audited financial statements, due 120 calendar days after fiscal year end, plus a semiannual Form 1-SA whose financial statements may be unaudited. These obligations continue until the issuer is eligible to suspend reporting under the rule's conditions. Tier 1 issuers file only a Form 1-Z exit report.
Plan the Raise Around the Audit, Not After It
The financial statements set the earliest date a Reg A+ offering can go live and the dates it may have to pause. Issuers who build their investor-acquisition plan around that calendar — testing the waters during the audit and SEC review, then scaling spend at qualification — avoid paying for traffic they cannot convert. Growth Turbine has provided marketing support across more than $540M in issuer-reported totals, and plans Reg A+ campaigns around the filing and qualification calendar set by the issuer's counsel and auditors. See how we structure Reg A+ marketing campaigns, then contact our team to map your launch timeline.
Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute legal, financial, or investment advice. Always consult with qualified legal counsel and financial advisors before launching a capital raise.
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