Stockholders, creditors, lenders, and investors often require audits from national or large regional firms. Although, we have audited hundreds of private and public companies, we currently provide only compiled financial statements for either internal or external use. We believe that a need exists to be a consultant to owners or management when they are required to employ a national or large regional CPA firm. When the need arises, we can make the appropiate introductions. With over 30 years of auditing private and public companies, we believe a liason will result in the least amount of disruption to management or the owners. We are available to help you prepare for the audit by preparing workpapers for the audit firm, drafting financial statements with footnotes and providing accounting research.
We can also answer questions that clients often have about understanding the audit process, the typical questions are :
Is my company receiving value ?
Help me understand GAAP / Generally Accepting Accounting Principles ?
Help me understand SOX / Sarbanes/Oxley ?
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.
All public companies are required to have an annual audit, but some nonpublic entities must undergo an annual audit as well. Also, many bank covenants, stockholder agreements or equity investors often require audits.
Also, companies with absentee ownership (Companies owned by individuals who live in Latin America, Europe and Asia, or individuals who no longer run the business, such as those owned by investment firms, or) may need an audit.
Review - Limited Assurance
A review is less extensive than an audit, but more involved than a compilation, a review engagement consists primarily of analytical procedures applied to the financial statements, and various inquiries of your company's management team.
A review doesn't require a study and evaluation your company's internal controls or verifification of data or physical inspection of assets. Rather, a review report expresses limited assurance in the form of the statement. Reviewed financial statements must include all required footnotes and other disclosures.
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.
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 bank, lender or other parties, as well as meet your budgetary constraints.