Audit, Review, and Compilation Services

We specialize in audit and review services for homeowner associations, nonprofit organizations, and certain small businesses.  We provide compilation services for individuals and small businesses.  A discussion of each type of service (engagement) is provided below for those who are not familiar with the varying level of assurance that applies to each type of engagement.

Audit

An audit is the highest level of assurance an accountant can offer.  An audit involves an examination of a clients accounting records as a basis for issuing a written report that expresses an opinion on the overall fairness of the financial statements. It is a regulatory requirement for many companies and organizations, but may be needed for other reasons including a condition of a loan agreement.  In recent years, the accounting profession has issued pronouncements that require more extensive auditing procedures during an audit.  In most cases, these changes provide more information available to the client than can result in improved efficiency and assist in various business decisions. 

Review

A review consists of an accountant performing analytical procedures and obtaining detailed information about the entity and the industry in which they operate.   The accountant will document the processes carried out by management and various employees of the entity. The analytical procedures will include a comparison of the prior year financial information with the current year and obtaining explanations of significant differences from management.  Analytical procedures will also include calculation and comparison of various financial ratios. The procedures performed by the accountant provides a basis for the limited assurance that he expresses in a review report.  In the report, the accountant will state that they are not aware of any material modifications that should be made to the entity's financial statements in order for them to be in conformity with U.S. generally accepted accounting principles.

Compilation

A compilation involves the preparation of financial statements by a CPA, and the issuance of a related compilation report.  The report does not provide any assurance with regard to the financial statements, thus a compilation is considered a non-assurance engagement.  As the name implies, the CPA compiles (assembles) the financial statements based on financial information provided by a client.  The CPA's report will state that the compiled financial statements were prepared from information supplied by the client, the information has not been audited or reviewed, and accordingly, no opinion ar any form of assurance is being expressed on the statements.

Although a compilation does not constitute any form of assurance, a recipient of the compiled financial statements may perceive a level of assurance knowing that a CPA prepared them.  An example would be a situation where the financial statements of a small business that is up for sale have been compiled by a CPA.  A prospective buyer who obtains compiled financial statements from the owner would likely have more confidence in the accuracy of those statements versus statements that were not compiled by a CPA.