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Whether a Reg-CF issuer needs audited financials depends almost entirely on how much it is raising and whether it has raised under Regulation Crowdfunding before. Regulation Crowdfunding sets a tiered financial statement requirement: the smallest offerings need only financial statements certified by the company's principal executive officer, mid-size offerings need a review by an independent public accountant, and the largest offerings need a full audit — with a one-time exception that lets first-time issuers substitute a review for an audit in the middle of the range.
This single question decides more Reg-CF launch timelines than any other. An officer certification can be produced in days. A review takes weeks. An audit can take months and cost multiples of a review. Issuers who discover the requirement after setting a target amount routinely lose a quarter to accounting work they did not budget for.
The tiered structure
Regulation Crowdfunding, adopted under Title III of the JOBS Act, scales its financial statement burden to the size of the raise. The relevant measure is the target offering amount plus any amount sold under Reg-CF in the preceding 12 months — not the amount the issuer ultimately raises. The tiers are:
- Smallest tier — financial statements certified by the principal executive officer as true and complete, accompanied by information from the issuer's federal income tax returns.
- Middle tier — financial statements reviewed by an independent public accountant.
- Largest tier — financial statements audited by an independent public accountant, subject to the first-time issuer exception below.
If an issuer already has audited financial statements prepared for another purpose, the SEC's rules generally require those audited statements to be used, even if a lower tier would otherwise permit a review or a certification. Having an audit sitting in a drawer removes the option to file something lighter.
The dollar thresholds — and why you must verify them
The dollar amounts separating these tiers are set by rule and adjusted for inflation periodically by the SEC. The thresholds most recently in effect are approximately $124,000 (below which officer certification is permitted), $618,000 (below which a review is permitted), and $1,235,000 (the ceiling on the first-time issuer exception), against a Reg-CF offering maximum of approximately $5 million in a 12-month period.
Pro tip: Treat every threshold in this article as directional, not operative. These figures are inflation-indexed and the SEC restates them by release. Before you set a target offering amount, confirm the current numbers against the SEC's most recent adjustment and with securities counsel. Setting a target $1,000 over a threshold you assumed was higher is an expensive way to learn this.
| Offering size (target + prior 12 months) | Financial statement requirement | Typical lead time | Relative cost |
|---|---|---|---|
| Up to ~$124,000 | Officer-certified statements + tax return information | Days to weeks | Lowest |
| ~$124,000 to ~$618,000 | Reviewed by independent public accountant | Several weeks | Moderate |
| ~$618,000 to ~$1,235,000 — first Reg-CF offering | Reviewed (audit exception applies) | Several weeks | Moderate |
| ~$618,000 to ~$1,235,000 — not first offering | Audited | Months | Highest |
| Above ~$1,235,000 to ~$5,000,000 | Audited | Months | Highest |
The first-time issuer exception
The exception that catches most founders by surprise, in a good way: an issuer conducting its first Reg-CF offering may provide reviewed rather than audited financial statements in the tier that would otherwise demand an audit, up to the ceiling. It is available once. An issuer that used it on its first raise and returns for a second Reg-CF offering in the same range will typically need audited statements the second time.
This has a planning consequence worth naming. Issuers who intend to raise twice under Reg-CF sometimes size the first raise to exploit the exception and then discover the second raise carries an audit cost they modeled at review prices. Model both raises before you scope the first one.
Review versus audit — what actually differs
These are distinct engagements under the accounting profession's standards, and the distinction is substantive rather than cosmetic:
- A review consists principally of analytical procedures and inquiries of management. The accountant provides limited assurance — a statement that they are not aware of material modifications needed for the statements to conform with the applicable framework.
- An audit requires the accountant to obtain reasonable assurance through substantive testing, confirmations, and evidence-gathering, and to express an opinion on whether the statements are fairly presented in all material respects.
The audit's evidentiary burden is why it costs and takes multiples of a review. It is also why an audit cannot be compressed by paying more — the procedures take the time they take.
What issuers get wrong
Treating the target amount as the trigger
The tier is set by the target offering amount plus Reg-CF sales in the trailing 12 months, not by proceeds. An issuer that targets an amount above a threshold and raises far less still owed the higher-tier statements at filing. Prior Reg-CF activity aggregates into the calculation and is regularly overlooked.
Starting the accounting after the marketing
The most common sequencing error. Investor demand built during a pre-launch period decays while an audit runs. Issuers typically start the accountant engagement in parallel with — not after — audience building, so the Form C can be filed while interest is still warm. Our breakdown of the Reg-CF campaign timeline from Form C to launch maps where the accounting work sits relative to everything else.
Assuming any accountant qualifies
The review or audit must be performed by an independent public accountant, and independence is a defined concept with real disqualifiers. A firm that provides bookkeeping to the issuer may not be independent for the engagement. Confirm independence before engaging, not after.
Ignoring the ongoing reporting obligation
The financial statements attached to a Form C are not the end of the obligation. Reg-CF issuers that complete an offering generally file an annual report on Form C-AR containing financial statements, subject to their own requirements, until a termination condition is met. The accounting relationship is recurring, not transactional.
How the requirement should inform your raise structure
The tiers create a genuine strategic question, and it is not simply "raise less to file less." A target set just under a threshold saves accounting cost but caps the raise. A target above it unlocks capital at the price of a longer, more expensive filing path. Issuers typically weigh:
- Capital actually needed — sizing a raise around an accounting threshold rather than a use of funds is a good way to underfund the business.
- Whether a second Reg-CF raise is likely — which determines whether the first-time exception is worth spending now.
- Whether Reg-CF is the right exemption at all — above a certain size the comparison shifts. Our Reg-CF vs. Reg-A+ cost and limit comparison covers where that line tends to fall.
- Existing audited statements — if they exist, the lower tiers are generally unavailable regardless of raise size.
Consult counsel and a qualified accountant to determine which tier applies to your facts. The rule is mechanical but the inputs — what counts as a prior offering, whether statements already exist, whether a firm is independent — are not always obvious from the outside.
Frequently Asked Questions
Do I need audited financials for a Reg-CF raise?
Only if your target offering amount plus Reg-CF sales in the prior 12 months exceeds the SEC's review threshold — and even then, first-time Reg-CF issuers may generally provide reviewed statements instead, up to a ceiling. Below the review threshold, an officer certification with tax return information is permitted. Verify current thresholds with counsel.
How long does a Reg-CF audit take?
Audits typically run months rather than weeks, because the procedures require substantive evidence-gathering that cannot be compressed. Reviews are materially faster. Issuers generally start the engagement in parallel with pre-launch marketing rather than after it.
Can I use my existing accountant?
Only if that accountant is independent under the applicable standards. A firm providing bookkeeping or similar services to the issuer may be disqualified from performing the review or audit. Confirm independence before engaging.
Does the requirement depend on what I actually raise?
No. It is set by the target offering amount plus prior Reg-CF sales in the trailing 12 months, measured at filing. Raising less than target does not retroactively lower the requirement.
What happens after the offering closes?
Reg-CF issuers that complete an offering generally file an annual report on Form C-AR with financial statements until a termination condition is met. Budget for the ongoing obligation, not just the raise.
Where marketing fits
The accounting tier determines your filing timeline; your investor pipeline determines whether the raise clears once filed. Those two clocks have to be synchronized — an audit finishing into a cold audience wastes both. Growth Turbine has provided marketing support across more than $490M in aggregate issuer-reported totals and 200+ campaigns supported across Reg-CF, Reg-D 506(c), Reg-A+, and tokenized securities offerings, spanning 23+ crowdfunding platforms and 25+ industries.
If you are scoping a Reg-CF raise and need the investor-acquisition side built to land when your Form C does, see our Reg-CF equity crowdfunding services. To discuss timeline and audience strategy for a specific offering, get in touch.
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.
