Audits - Reviews - Compilations

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Stockholders, creditors, and private investors often require assurance that a company's financial statements accurately reflect its true financial status.

Recognizing that different stakeholders have varying levels of risk tolerance, we offer three tiers of assurance to cater to your needs.

 

Audit - Highest Level of Assurance  
An audit provides the most comprehensive level of assurance. It involves a systematic review and objective examination of financial statements, including the verification of specific information as determined by the auditor or established best practices.

Our audit process includes evaluating internal controls, testing selected transactions, and communicating with third parties. Based on our findings, we issue a report confirming whether the financial statements are fairly presented and free from material misstatements.

An audit enables you to:

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- Satisfy stakeholders—including employees, customers, suppliers, and the investing community—regarding the credibility of published information.
- Ensure timely and accurate payment of corporate taxes, goods and services tax, and other taxes, thereby avoiding interest, penalties, and audits.
- Comply with banking covenants.
- Deter and detect material fraud and errors.
- Facilitate business purchases and sales.

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What You Receive: 

You gain the highest level of assurance as we gather information from outside your company. This typically includes written communications with:

- Your customers to verify outstanding receivable balances.
- Your banks to confirm cash or debt balances and terms.
- Your vendors to validate outstanding payable balances.
- Your attorneys for details on any pending or threatened legal actions.

 

We also conduct physical inspections by observing your inventory counting methods and performing test counts. Our audit documentation includes a detailed work program outlining the examinations and tests conducted, alongside the client's supporting work papers.

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Review - Limited Assurance 
A review provides less extensive assurance than an audit but is more thorough than a compilation. It primarily involves analytical procedures applied to the financial statements and inquiries made to your company's management. If any inconsistencies or questionable information arise, we may need to perform additional procedures.

A review does not require us to assess your company's internal controls or verify data with third parties or conduct physical asset inspections. Instead, it expresses limited assurance through a statement indicating, "We are not aware of any material modifications" needed for the financial statements to comply with Generally Accepted Accounting Principles (GAAP). Reviewed financial statements must include all necessary footnotes and disclosures.

Why might a business request a review? It serves as a middle ground, offering the benefits of a CPA's expertise without the extensive work and costs associated with an audit.

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Compilation - Lowest Level of Assurance
In compiling financial statements, we present information based solely on management's representation and do not express any opinion or assurance regarding the statements. Compilations do not require inquiries 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 agreements.

 
Each type of financial statement report may be suitable for specific circumstances, depending on your client's bank requirements and budgetary considerations. Understanding the unique strengths and limitations of each report can help you select the most appropriate one. Please feel free to reach out if you have questions about which report best fits your needs.