What financial statements do I need for a surety bond?

It depends on the size of the program, not the size of one bond. A small licence or permit bond usually needs none. A modest contract program runs on internally prepared statements. As the program grows a surety moves you up to CPA-prepared work: compiled, then reviewed, then audited.

At what dollar amount do I need CPA-reviewed statements?

There is no fixed threshold, and anyone quoting you one is describing their own market rather than a rule. Sureties set it individually and adjust it for your track record, your working capital, and how much appetite the market has that year. The honest answer is a range, and your broker can tell you where you sit in it.

What is the difference between compiled, reviewed, and audited?

They are levels of CPA assurance. A compilation presents your numbers in statement form with no assurance. A review adds limited assurance through analysis and inquiry. An audit gives reasonable assurance and involves real testing and confirmation. Each step up costs more and carries more weight with an underwriter.

Can I get bonded with internally prepared statements?

Yes, for smaller programs. Plenty of contractors run a working bonding line on clean in-house statements. What changes as the numbers grow is not honesty but verification: the surety wants an independent party to have looked.

Is upgrading my statements worth the cost?

It is when the statement level, rather than the balance sheet, is the thing capping you. If your working capital would support more work but the surety will not extend it on unaudited numbers, the accounting fee buys capacity. If the balance sheet itself is thin, an audit of a thin balance sheet is still thin.

What Financial Statements a Surety Needs, by Bond Size

Contract bonding, by the numbers

$150,000: Federal contract size that requires performance and payment bonds; Acquisition.gov (FAR 28.102)
$9M: Contract size the SBA will back a bond for ($14M on federal work); SBA
~80%: New U.S. construction businesses that survive their first year; U.S. BLS
$8.6B: U.S. surety direct written premium; SFAA, 2022

First: it tracks the program, not the bond

Contractors usually ask this about a single job — what do I need for a $2 million bond? But a surety is not underwriting one bond. It is setting a bonding capacity: a single-job limit and an aggregate limit for everything you have open at once. The statement level follows the size of that whole program.

Which is why one contractor gets a $2 million bond on in-house statements and another is asked for a review. The first is chasing one job that size; the second is carrying five.

The four levels, in plain terms

Internally prepared. Your own books, printed as a balance sheet and income statement. No outside party involved. Fine for smaller programs, and the level most contractors start at.
Compiled. A CPA puts your numbers into proper statement format. No assurance is expressed — the CPA is not vouching for them — but the presentation is correct and someone qualified has handled it.
Reviewed. The CPA performs analytical procedures and inquiries and expresses limited assurance. This is the workhorse level for established contractors, and the step that most often unlocks a materially bigger program.
Audited. Reasonable assurance, with actual testing, confirmations, and verification. The highest level, the most expensive, and what larger programs and much public work expect.

Each step costs more and carries more weight. Nothing about the higher levels implies the lower ones are dishonest — the difference is how much independent verification stands behind the numbers.

Why nobody will give you a threshold

You will not find a published table saying reviewed statements begin at a particular contract value. That is not evasion. Sureties genuinely set it per contractor, and the same company can be told different things by two markets in the same week, because the answer moves with:

Your track record. A contractor with ten clean bonded jobs behind them gets more room on lighter statements than a first-timer at the same size.
Working capital and net worth. A strong balance sheet buys tolerance. A thin one invites scrutiny at any size.
Market appetite. Underwriting standards tighten and loosen. The same file can be routine one year and a stretch the next.
The obligee.Some public owners and larger private owners impose their own requirements on top of the surety's.

So the useful question is not "what is the threshold" but "where does my file sit right now, and what would move it." That is answerable in a phone call, and it is worth asking before you commission an audit you may not need.

How the levels usually map to programs

Directionally, and with everything above as the caveat:

Licence and permit bonds. No financial statements at all. The California contractor licence bond is a fixed amount priced on credit, so there is nothing to underwrite financially.
Small contract programs. Internally prepared statements plus a work-in-progress schedule and a personal financial statement from the owners.
Growing programs. A compilation or review, and the expectation that interim statements arrive on a regular cycle rather than once a year.
Larger programs. Reviewed or audited statements, prepared on percentage-of-completion, with the WIP schedule reconciling to them.

What matters as much as the level

Contractors focus on the tier and underrate everything else about the file. An underwriter reading a reviewed statement that arrives eight months stale, with a WIP schedule that does not tie to it, is not impressed by the review.

Currency. A fiscal year-end statement plus a recent interim beats a prestigious statement that has gone cold. Currency is a scoring factor, not a formality.
Percentage-of-completion. Completed-contract or cash-basis statements distort a construction balance sheet badly. Sureties expect percentage-of-completion, and its absence is a bigger problem than a missing review.
Supporting schedules. The WIP schedule, a contracts-completed schedule, and an accounts-receivable ageing. These are what an underwriter actually reads.
Consistency. Numbers that reconcile across the statements, the WIP, and the questionnaire build credibility. Numbers that do not, cost it.

When upgrading is worth the money

Moving up a level costs real money and real time. It is worth it when the statement level, not the balance sheet, is what is capping you — when an underwriter has effectively said the numbers would support more work if they were verified. Then the accounting fee buys capacity, and it usually pays for itself on the first larger job.

It is not worth it when the balance sheet is the constraint. An audit of a thin balance sheet is a thin balance sheet with an audit attached. In that situation the leverage is elsewhere: retaining earnings, freeing up cash tied in public works retention, adding funds control on a specific job, or going through the SBA guarantee programme, which is built for exactly the contractor whose numbers are not there yet.

Ask before you spend. Send us what you have now and we will tell you whether a higher tier would actually move your program, and roughly how far — and if it would not, we will say that too. Then read what to look for in a CPA before you engage one, because who prepares the statements matters nearly as much as the level. Or start a contract bond quote. Underwriting always applies and we never promise guaranteed approval.