Reviews, Compilations and Audits
Stockholders, creditors, bonding companies, and private investors often need assurance that the financial statements accurately represent the true financial position of a company. These parties have different levels of risk tolerance, so we provide three levels of assurance to meet your needs.
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. Banks and surety bonding companies often require compilations from an independent CPA as part of their lending convenants or performance bonding issuance.
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 company management. If the financial statements or supporting information appear inconsistent or otherwise questionable, we may perform additional procedures. A review report expresses limited assurance in the form of the statement: "We are not aware of any material modifications "for the statements to be in confirmity with Generally Accepted Accounting Principles (GAAP) Reviewed statements must include all required footnotes and other disclosures.
An audit provides the highest level of assurance. An audit is a methodical review and objective examination of the financial statements, including the verfication of specific information as determined by the auditor or as established by general practice. The audit 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.