Information About Financial Reviews for Cosmetology Schools
The review is intended to confirm that schools are fiscally sound and have a low-risk of closing due to financial insecurity.
Subject of the Review
The review is completed on the owner of the school:
- If the owner is a sole proprietor, then personal information can be used for the review.
- If the owner is a LLC or Corporation, the review must be completed on the company.
- If the applicant does not have a previous business, the statement will be completed on personal current financial situations.
A “financial statement”, as described in the Cosmetology Program rules, is a record of the financial activities and position of a business, person or entity. Relevant financial information is provided in a structured manner. Financial statements are the main source of financial information for most decision makers as proof of financial reliability.
TDLR recommends providing a balance sheet with your financial statement, which summarizes the company’s financial position. The balance sheet should include the company’s assets, liabilities, and equity at a particular point in time.
The financial statement delivered to TDLR may not be older than 180 days.
If the financial statement is more than 180 days old, you must also provide a supplemental financial statement that was prepared within 180 days of the application.
A financial statement must be prepared by a CPA and include a notice that “no assurance is provided” on the financial statement. This is because the CPA is preparing the statement using the records provided by the business or individual and the information has not been verified for accuracy.
Compilation is the most popular method, in which a CPA is not checking facts but is providing the financial statement based on the information provided by the client.
Submitting a Financial Statement
Financial statements should be submitted with your completed license application form.
If you have already submitted your license application, please contact us and include the documents as attached files.