Audits / Review / Compilations

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.

Most local governments, not-for-profit agencies and other organizations receiving grants as well as large employee benefit plans are required to have an annual audit. Some financial institutions require audits of nonpublic companies based on the amount financed 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 to check their management teams.

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.

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.

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 business.