Management (board), shareholders, bankers, development agencies (grant funding) and investors need assurance that the financial statements accurately represent the true financial position of a company.
Agreed upon procedures can be tailored to meet the unique and individual circumstances which arise for our clients. Common examples include due diligence, review of internal controls investigating areas for fraud.
There are three different levels of engagements associated with the financial statements of a business: and the chosen depends on the level of risk.
An audit provides the highest form of assurance and requires a CPA to provide an independent professional opinion on whether the financial statements are fairly stated.
To provide this opinion we are required to Our work is designed to gain an in-depth understanding of the organisation, review internal controls, test of selected transactions, and obtain assurance from third parties such as bankers and lawyers. Based on our findings, we issue a report on whether the financial statements are fairly stated and free of material misstatements.
As an added service we comment on areas requiring improved control and area where the organisation can improve efficiencies.
A review is used where the business does not need an audit. A review, which is lower than an audit, consists of inquiry of management, analytical procedures and discussion based on the original source documents to allow us to ascertain whether they are plausible, that is, worthy of belief. report on the financial statements.
If, after reviewing the financial statements the accountants are satisfied that the financial statements are not misleading, the accountants’ standard report will preface the financial statements.
A review does not contemplate obtaining an understanding of the internal control or assessing control risk, tests of accounting records and responses to inquiries by obtaining corroborating evidence.
Compilation engagements involve assisting a business in preparing unaudited special purpose statements for income tax or management purposes. A compilation engagement is appropriate only where the client and other users do not need financial information that is audited or reviewed.
Compilations do not require testing, benchmarking, or analytical procedures.
A compilation report will warn readers that the statements have not been audited or reviewed and, accordingly, do not express an opinion or any other form of assurance on them, and that the information may not be appropriate for use by the reader.