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Monday, October 25, 2021


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Audited Financial Statements

Audited financial statements are the most extensive CPA service related to financial statements and are the primary focus of my practice. An audit is an examination of your company's or organization's financial statements, involves statistical sampling, testing of records, internal and external confirmation of data, and analysis of your accounting, internal and management controls. It results in an independent opinion on your company's or organization's financial statements. 

My background and experience is extensive in this area allowing me to provide audit services with the highest level of competency to your business or nonprofit organization.

I can consult with you and help in deciding if an audit what you need, setting expectations, help prepare for the audit. In some cases, your audit requirements are such that a larger CPA firm would be a better fit to perform the audit. In such cases I can act as your consulting CPA, helping your with the CPA firm selection process.

My auditing focus is on small businesses (manufacturing, services, hotels, franchisors) and not-for-profit organizations, including churches and private foundations.

Audits-What to expect-The audit services performed by the CPA have changed substantially over the last few years. Many clients think an audit is just verifying balances and issuing a report. While never been totally true, today it's much more. Working backwards, yes, we do verify balances (and more) and issue the report. However, there's much more than typically perceived. First the audit report must follow the guidelines of Generally Accepted Accounting Principles (GAAP) which means accounting treatment that may differ from the day-to-day accounting.

The auditor is also required to perform a risk analysis and to review internal control. A written report of the finding are required the auditor. So now, there are two reports to be issued by the auditor. These procedures are under the guideline of Generally Accepted Auditing Standards (GAAS).

But the clients many times ask, "we're a small entity and don't really care about all that stuff. Can't you just look things over and be done with it?" Again, our professional standards require that we follow the GAAS guidelines and the financial statements in accordance with GAAP.

So, in summary there's a lot that the CPA does to perform the audit, much of which has questionable value to the client.

Potential clients may want to learn more about these services, the value and the costs. If all this seems more than what you need, then perhaps a reviewed financial statement may be a better approach.