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. The audit methodology is a risk assessment approach which focuses on significant audit areas, accounts and transactions.
Our work includes obtaining an understanding of the Organization and its environment including internal controls, testing of selected evidence supporting 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 customers, lenders, contributors, and/or grantors as to the credibility of your financial information.
- Comply with banking, lender, grantor, and by-laws covenants.
- Facilitate the purchase and sale of businesses.
Here's what we do...
- Assess the the risk of material misstatement of your financial information.
- Design the nature, timing, and extent of audit procedures to minimize that risk.
- Make inquires of individual employees.
- Perform tests of documentary evidence, physical evidence, and direct confirmation of third parties, such as customers, banks, vendors, and attorneys.
- Document and test each operating cycle, such as sales, contributions, expenses, and payroll.
- Document the examinations and tests performed, as well as maintain supporting work papers.
Here's what you get...
- An independent party to provide your audit services.
- The highest level of assurance because our audit procedures conform to all professional standards.
- Our opinion about whether your financial statements are fairly presented.
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.
We will not 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 Accounting Principles Generally Accepted in the United States (GAAP). Reviewed financial statements must include all required footnotes and other disclosures.
Because a review engagement provides some, even though limited, assurance, it can be a less expensive way to comply with the financial statement requirements.
Compilation - Lowest Level of Assurance
In compiling financial statements for a client, we present information that is the "representation of management" and express 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 business.
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.
