CPA Reports for Money Services Businesses (MSBs)

Q: What CPA reports do Money Services Businesses (MSBs) need?

Money Services Businesses (MSBs) often need CPA reports when banks, regulators, or partners require independent financial reporting or compliance support. Depending on your needs, this may include audited or reviewed financial statements, agreed-upon procedures (AUP) testing, or CPA verification letters tied to specific requirements. The right report depends on what the bank or regulator is asking for—so the goal is to meet the minimum requirement without overpaying for unnecessary assurance.

1. Overview

Money Services Businesses (MSBs)—such as money transmitters, check cashers, crypto exchanges, and currency dealers—operate in one of the most highly regulated environments in the U.S. Because of this, regulators, banks, and compliance partners often require independent verification from a CPA. A CPA MSB report is typically used to show whether the business is maintaining proper records, meeting financial requirements, and following AML/BSA expectations.

These reports are not always audits. Often, banks or regulators ask for targeted financial statements, net worth verification, or specific compliance procedures.

2. Who Needs This & When

You may need a CPA report if you:

• Are applying for state MSB licensing.

• Are renewing your MSB registration and the state requires updated financials.

• Need to demonstrate minimum net worth or bonding capacity.

• Are opening or maintaining banking relationships.

• Operate in crypto and need a CPA report to satisfy exchange partners or custodians.

• Are asked by regulators or compliance firms to provide independently prepared financial statements.

3. Common Real-World Scenarios

You may need a CPA MSB report when:

• A state licensing division requires CPA-prepared financials as part of the MSB license application.

• A bank requests proof of net worth or verification of investor capital before approving an MSB account.

• A compliance partner asks for verification of transaction volumes or revenue sources.

• A crypto OTC desk needs a CPA to verify source of funds for onboarding.

• A payment processor requests a CPA letter confirming financial health and operational capacity.

4. Regulatory / Third-Party Background

MSBs are regulated by:

• FinCEN (federal)

• State banking/financial services divisions (state licensing)

• Banking partners (internal risk/compliance)

Many states require:

• CPA-prepared or audited financial statements

• Net worth verification letters

• Compliance-related confirmations

Banks may ask for:

• CPA net worth calculations

• Verification of capital sources

• AUP testing over specific areas

5. Industries Where This Is Most Relevant

CPA MSB reporting is common in:

• Crypto exchanges and OTC desks

• Money transmitters and remittance companies

• Check cashing and bill payment services

• Currency dealers (physical or online)

• Prepaid access providers

• Fintech firms operating MSB‑related products

6. Why a CPA Is Typically Involved

MSB regulators and banks rely on CPAs because they:

• Are independent and licensed

• Follow professional standards

• Provide credibility to financial information

• Help assess compliance and financial stability

CPA involvement gives third parties confidence that the MSB is financially viable and properly documented.

7. What the CPA Actually Does / Documents Needed

Depending on requirements, a CPA may:

• Prepare or review financial statements

• Verify net worth or investor contributions

• Perform AUP procedures on specific balances or transactions

• Confirm compliance‑related metrics

• Issue a CPA comfort or verification letter

Documents typically needed:

• Trial balance and general ledger

• Bank statements

• Ownership records

• Compliance documentation

• Licensing requirements

8. Deliverables (with Illustrative Excerpt)

Deliverables may include:

• CPA‑prepared financial statements

• MSB net worth verification letter

• Source‑of‑funds verification report

• AUP report covering licensing or compliance items

• Financial analysis or onboarding packet for banks

Illustrative excerpt:

"We verified that ABC MSB LLC maintained a net worth of not less than $____ as required by the \ Financial Services Division. Our procedures and findings are described below. This report is intended solely for the use of ABC MSB LLC and the licensing authority."

9. Timeline & Fee Ranges

Typical timelines:

• Simple verification letter: 3–7 days

• CPA‑prepared MSB financials: 1–3 weeks

• AUP procedures: 2–6 weeks

Typical fees:

• Verification letters: $1,500–$5,000

• CPA‑prepared MSB financial statements: $4,000–$12,500

• AUP reports: $7,500–$30,000+

10. Common Mistakes & Misunderstandings

• Assuming MSB requirements are the same across states—they vary widely.

• Waiting until the license deadline to collect required documents.

• Thinking banks accept internal financials—most want CPA‑prepared.

• Not documenting investor contributions or crypto liquidity properly.

• Expecting a CPA to \"approve\" compliance—their role is financial verification.

11. How Jedidiah CPA Can Help

Jedidiah CPA supports MSBs (subject to independence requirements) with:

• CPA‑prepared or reviewed financial statements

• MSB licensing‑ready financial packages

• Net worth and financial capacity verification letters

• AUP testing for regulators or banking partners

• Advisory on improving internal controls and financial clarity

Our goal is to help you stay compliant, maintain strong banking relationships, and scale confidently.

Independence consideration

Whenever an engagement requires independence under professional standards, Jedidiah CPA cannot perform bookkeeping, financial statement preparation, or management functions for the same client during the period of that engagement.

In industries involving digital assets, crypto, and money services businesses, independence and objectivity are critical. A CPA firm must not control wallets, initiate transactions, hold private keys, or custody client funds and then provide verification of balances or source-of-funds confirmations. Only independent, third-party-based attestations are permitted to protect integrity, transparency, and regulatory confidence.

Disclaimer

This article is for general informational purposes only and does not constitute legal, accounting, or regulatory advice. MSB requirements vary significantly by state, bank, and business type. Always consult a qualified CPA and MSB compliance expert regarding your specific situation.

FAQs

What is an MSB, and why do banks request CPA reports?

Banks may request CPA-prepared or CPA-verified financial reporting to support risk reviews, compliance expectations, and ongoing account monitoring for MSBs.

Do MSBs need an audit, a review, or an AUP report?

It depends on the requirement. Audits provide high assurance, reviews provide limited assurance, and AUPs verify only specific items requested.

What documents should an MSB prepare before requesting a CPA report?

Typically: bank statements, reconciliations, general ledger detail, financial statements, transaction summaries, policies/procedures, and any bank/regulator request letter outlining what’s needed.

How long do CPA reports for MSBs usually take?

Timelines vary by scope and readiness. AUPs can be faster than audits, while audits typically take the longest depending on complexity and documentation quality.

Can a CPA “certify” that an MSB is compliant or safe?

No. CPAs can report on financial statements or specific procedures performed, but they cannot guarantee compliance outcomes, future performance, or approve the business for banking or regulatory purposes.

Other FAQs

1. Who requires MSB CPA reports? State regulators, banks, and payment partners.

2. What can CPAs verify for MSBs? Financial statements, net worth, liquidity, and factual financial documentation.

3. Do regulators require assurance? Some require compilations, reviews, or audits depending on state law.

4. What documents do MSBs need? Financials, tax returns, AML/BSA documentation, bank statements, and compliance reports.

5. How long does the process take? 1–3 weeks depending on requirements.