|Stockholders, creditors, and private investors often
need assurance that the financial statements accurately represent the true
financial position of a company.
stockholders, creditors, or private investors have different levels of risk
tolerance, so we provide three levels of assurance to meet your needs.
Audit - Highest Level of Assurance
An audit provides the highest level of assurance. An
audit is a methodical review and objective examination of the financial
statements, including the verification of specific information as determined
by the auditor or as established by general practice.
Our work includes a review of internal controls,
testing of selected transactions, and communication with third parties.
Based on our findings, we issue a report on whether the financial statements
are fairly stated and free of material misstatements.
An Audit allows you to...
- Satisfy stakeholders such as employees, customers,
suppliers and pressure groups, as well as the investing community, as to
the credibility of published information.
- Facilitate the payment of corporate tax, goods and
services tax, and other taxes on-time and accurately, thereby avoiding
interest, penalties, and investigations.
- Comply with banking covenants.
- Help deter and detect material fraud and error.
- Facilitate the purchase and sale of businesses.
Here's what you get...
You get the highest level of assurance because we go
outside your company to obtain more information. Typically, we'll have
written communication with:
- Your customers, to check outstanding receivable
- Your banks, to confirm cash or debt balances and
- Your vendors, to verify outstanding payable
- Your attorneys, for information on pending or
threatened legal action.
We also perform physical inspections by observing your
inventory counting methods and perform test counts. We document and test
each operating cycle, including sales and cash receipts, expenses and cash
disbursements, and payroll. Our audit papers include a detailed work program
to document the examinations and testing performed, as well as the client's
supporting work papers.
Audits Not Just for Public Entities
All public companies are required to have an annual
audit, but some nonpublic entities must undergo an annual audit as well.
These include local governments, not-for-profit agencies and other
organizations receiving government grants.
Moreover, some financial institutions require audits
of nonpublic companies based on the financing amount and/or the bank's
assessment of the company's risk. Also, companies with absentee ownership
(such as those owned by investment firms, or individuals who no longer run
the business) may order audits as checks of their management teams.
Review - Limited Assurance
Less extensive than an audit, but more involved than a
compilation, a review engagement consists primarily of analytical procedures
we apply to the financial statements, and various inquiries we make of your
company's management team. If the financial statements or supporting
information appear inconsistent or otherwise questionable, we may need to
perform additional procedures.
A review doesn't require us to study and evaluate your
company's internal controls or verify data with third parties or physically
inspect assets. Rather, a review report expresses limited assurance in the
form of the statement: "We are not aware of any material modifications" for
the financial statements to be in conformity with the Generally Accepted
Accounting Principles (GAAP). Reviewed financial statements must include all
required footnotes and other disclosures.
Why might a business request a review engagement? It
can be a good middle ground, providing the advantages of a CPA's technical
expertise without the work and expense of an audit.
Compilation - Lowest Level of Assurance
In compiling financial statements for a client, we
present information that is the "representation of management" and expresses
no opinion or assurance on the statements. Compilations don't require
inquiries of management or analytical procedures. Instead, we rely on our
knowledge of accounting principles and a general understanding of your
Banks often require compilations from an independent
Accountant as part of their lending covenants.
Which Report Should You Use?
Each type of financial statement report may suit
specific circumstances, depending on requirements from your client's bank or
other parties, as well as meet budgetary needs.
Understanding each report's unique strengths and
weaknesses can help you choose the most appropriate one. Please call if you
have questions about which type of report is right for you or complete the
form below for a Free Consultation.
Questions or Comments:
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