Audits & Reviews

Audit Services

An audit is the highest level of service available from a CPA firm. It includes independent verification of the company’s assets, liabilities, revenues and expenses. Auditing procedures include confirmation with third parties, visual inspection of documents, recalculation of important financial ratios and percentages, analytical review, inquiry and observation, and a variety of other procedures designed to verify financial data.

A company may be required to have an audit for any number of reasons: (1) to comply with a bank lending agreement, (2) to satisfy a stockholder agreement, (3) to obtain third-party insurance coverage, such as a performance bond, or (4) to establish a series of audited financial statements in an effort of "going public." Or a company may decide to have an audit simply because it desires the in-depth testing and validation procedures which an audit provides.

For whatever reason, when your business requires an independent audit opinion on its financial statements, we will conduct an efficient and cost-effective audit with an emphasis on understanding the unique characteristics of your business. We will assist you in the presentation of your financial statements, supplementary schedules, footnotes, and any other required disclosures.

Our audits are conducted in accordance with generally accepted auditing standards (GAAS). We ensure that the financial statements utilize generally accepted accounting principles (GAAP) as promulgated by the American Institute of Certified Public Accountants (AICPA). Because an audit does not involve 100% verification of every transaction, we utilize nonstatistical audit sampling techniques as permitted by Statement on Auditing Standards (SAS) #39 and the AICPA Audit and Accounting Guide "Audit Sampling.”

Nonprofit Audits

We specialize in the audit of not-for-profit organizations subject to the provisions of section 501(c)(3) of the Internal Revenue Code. Accordingly, we follow accounting pronouncements FASB #116, #117 and #124, and, when applicable, OMB Circular A-133 during our audits. OMB A-133 is applicable when federal support exceeds $500,000.

Management Letters

One of the more important byproducts of our audit services is the issuance of a Letter to Management communicating our recommendations for improving accounting processes and strengthening internal control procedures. In accordance with SAS #60, we issue these “Management Letters” with several objectives in mind:

· To Identify material weaknesses (if any)

· To communicate reportable conditions involving weaknesses which are NOT material

· To disclose other matters pertaining to internal controls

In accordance with SAS #61, we endeavor to meet with management and/or the Board of Directors at the end of the engagement to:

· Review the results of the audit engagement

· Discuss the adjustments made to the financial statements

· Review any difficulties encountered during the audit

· Discuss our comments regarding the quality of the internal accounting policies.

An example of an audit opinion:

We have audited the accompanying balance sheets of XYZ Corporation as of June 30, 2008 and 2007 and the related statements of income and changes in stockholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of XYZ Corporation management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of XYZ Corporation as of June 30, 2008 and 2007, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Review Services

A review is the second highest level of service available from a CPA firm. It does NOT include independent verification of the company’s assets, liabilities, revenues and expenses. Review procedures include visual inspection of documents, recalculation of important financial ratios and percentages, analytical review, inquiry and observation, and a variety of other procedures designed to verify internally prepared financial data.

A review of your financial statements will result in the preparation of full disclosure financial statements, with limited assurance on the fairness of their presentation. While not as in-depth as an audit, a review does provide many useful services.

We analyze your financial position and result of operations, including comparison to prior year and to industry averages. Variations are investigated and explained to management.

We identify internal control weaknesses or potential enhancements to operating procedures which are then communicated to management.

A review is generally the minimum level of assurance required by banks for debt agreements. Additionally, many bonding companies will accept reviewed financial statements for certain performance bonds. In some cases, a financial institution will permit the issuance of compiled financial statements, which are substantially less in scope than an audit or review.

	Copyright © 1999 - 2009 Regalia & Associates	Last Modified January 5, 2009