Stockholders, creditors, and private investors often
need assurance that the financial statements accurately
represent the true financial position of a company.
Your stockholders, creditors, or private investors
have different levels of risk tolerance, so we provide
three levels of assurance to meet your needs.
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
- Facilitate the payment of corporate tax, goods
and services tax, and other taxes on-time and
accurately, thereby avoiding interest, penalties,
- 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
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
Review - Limited
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
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. A compilation is limited to presenting
information that is the representation of management in
the form of financial statements and supplementary
information and accordingly we do not express any degree
of assurance on the statements. In a review of a
company’s financial statements, we express limited
assurance that there are no material modifications that
should be made to the financial statements. A review
consists principally of inquiries of company personnel
and analytical procedures applied to financial data.
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 business. Banks often require compilations from an independent
CPA 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
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.
Understanding each report's unique strengths
and weaknesses can help you choose the most appropriate