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 are 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 you 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 true, today it’s much more. Working backward, 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 review internal control. A written report of the finding has 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.

Reviewed financial statement services are an in-depth service including looking for unusual items or trends and compares your company’s financial status to other companies in the same industry. Reviews are also a major component of my practice. The review report expresses the limited assurance that no material changes are needed in the financial statements for them to be in conformity with generally accepted accounting principles (GAAP). Reviewed financial statements are more costly than compiled financial statements, yet less expensive than an audit.

As with financial statement audits, my background and experience can help you in deciding if this service is what you need, setting expectations, and helping to prepare for the review. Reviewed financial services are a service providing a high level of assurance without the cost and time-consuming steps needed in an audit. This is currently my most requested service.

As with audit services my focus is on small businesses and not-for-profit organizations, including churches and private foundations.

Compiled financial statements involve taking financial information provided by the company and compiling it into financial statement format. This is done by an outside CPA and the statements are solely based on the information provided by the company. The compilation report states that the financial statements are the representation of management, that the statements have not been audited or reviewed, and that no opinion or other form of assurance has been expressed. To say it another way, although compiled financial statements are independently prepared, they don’t offer any type of assurance to the accuracy of the statements or their conformity to generally accepted accounting principles (GAAP). You will see these most frequently in smaller companies because they are the least expensive and easiest option.

These services are usually best when an outside CPA is needed to help with the financial reporting. (Quickbooks reports are not financial reporting). If the compilation report is on GAAP financial statements, then the services get more involved as the required footnotes are needed. If footnotes are needed then a compilation report can be issued “with financial disclosures omitted”. This is then just the basic financial statements.

Beginning in 2016 a new financial statement preparation service can be provided by the CPA. This service, while very similar to a compilation, is strictly preparing the financial statements and not issuing any report or any kind of assurance on the financial statements.

Bookkeeping (Monthly/Quarterly/Annual). For companies without the resources, basic bookkeeping services may be the practical solution. I will typically engage the services of a qualified bookkeeper to help you with daily accounting issues which help to keep the cost to a minimum.

Back Office Support is a service I provide to help companies with recurring time-consuming tasks and have a need to share the information with others in a collaborative manner. These services are highly specialized and are web-based allowing all members of the entity’s team to review the information at any time. These services are described elsewhere on this website.

With a basic financial statement preparation service, the CPA is merely assisting management or the business owner in preparing financial statements, in a similar manner to what an in-house controller might prepare for the company for internal company use. These financial statements may be for internal company use, may fulfill some lenders’ requirements related to a loan or other uses. If the CPA prepared financial statements are shared outside of the company, they  include a notice that “no assurance is provided”.  The CPA does not include any formal report with these financial statements and independence is not required.