Audits, Reviews and Compilations -
AUDIT - Businesses frequently need a CPA firm to "attest" that their financial statements are in accordance with U.S. Generally Accepted Accounting Principles ("U.S. GAAP"). In this case, Hennekes CPA Services can perform your Audit or Review. For private companies, our Audits meet the requirements of U.S. Generally Accepted Auditing Standards ("U.S. GAAS"). Audits of NonProfit Organizations can be expanded to include "Yellow Book" standards also referred to as Generally Accepted Government Auditing Standards ("GAGAS").
REVIEW - If you don't need a "full blown" Audit, then Hennekes CPA Services can perform a Review of your U.S. GAAP financial statements. Reviews are less extensive than Audits and are performed according to the AICPA's Statements on Standards for Accounting and Review Services ("SSARS").
A-133 EXAM - Government funded NonProfits with over $500,000 in Federal grants are required to have a yearly "A-133" Compliance Examination. Audits of government funded agencies normally are required to be performed in accordance with "Yellow Book" or Generally Accepted Government Auditing Standards ("GAGAS") even when below that dollar limit. For those exceeding the $500,000 Federal expenditures limitation, the specialized compliance examination includes testing pursuant to the U.S. Office of Management and Budget ("OMB") Circular A-133. We design compliance audits that test for your compliance with OMB Circulars A-110, A-122 and A-133.
RETIREMENT PLAN AUDIT - Businesses and NonProfits that have a Tax Qualified Retirement Plan with more than 100 eligible participants must file a CPA certified audit for inclusion with the annual 5500 filing. We have experience with auditing 401(k), 403(b) and other retirement and profit sharing plans. These audits satisfy the requirements of the Employer Retirement Income Security Act ("ERISA") as well as the regulations of the U.S. Department of Labor ("DOL") and the Internal Revenue Service ("IRS").
CONFUSED by these SERVICE LEVELS?
More Complete Descriptions Follow:
Audit - Highest Level of Assurance
An audit provides the highest level of assurance. An audit is an independent and objective examination of your financial statements, including the verification of specific transactions and balances in accordance with U.S. GAAS standards.
Our work includes a general understanding of your internal controls to pal appropriate auditing procedures relevant to your company or organization and your industry. Our audit also includes tests of selected transactions, examination of invoices, checks and deposits as well as confirmation communications with third parties.
Reasons for an Audit:
- Satisfy shareholders if a private corporation. Satisfy grantors, donors and/or the government if a NonProfit organization.
- As a condition to a loan or for compliance with banking loan covenants.
- Facilitate the purchase or sale of a Business or a NonProfit.
Here's what you get:
- Professionally Bound report with CPA's "Fairness Opinion".
- Full U.S. GAAP financial statements complete with GAAP required "footnotes".
- Management Letter - letter regarding weaknesses in internal controls, if any and recommendations regarding accounting and your operations.
We also perform physical inspections by observing your inventory counting methods and perform test counts. We document and test each operating cycle, including sales and cash receipts, expenses and cash disbursements, and payroll. Our audit papers include a detailed work program to document the examinations and testing performed, as well as the client's supporting work papers.
Review - Limited Assurance
Less extensive than an audit, a review consists primarily of analytical procedures on your financial statements, and inquiries we make of your management team. If the financial statements or supporting information appear inconsistent or otherwise questionable, we may need to perform additional procedures.
A review doesn't require us to study and evaluate your company's internal controls or verify data with third parties or detail examination of records, checks or deposits. Rather, we would perform the analyticals and inquiries to see if we note any material departures from the accounting rules.expresses limited assurance in the form of the statement.
Reasons for a Review:
- The reasons for an audit (above) can be the same reasons for a review.
- Since review procedures are less extensive, this means lower cost to our clients, so if your stakeholders or the bank don't require an audit, they might accept a review.
Here's what you get:
- Professionally Bound report with CPA's Review Report which would say something like "We are not aware of any material departures from U.S. Generally Accepted Accounting Principles (U.S. GAAP").
- Full set of financial statements complete with GAAP required "footnotes".
Compilation - Prepare Financial Statements
In compiling financial statements for a client, we present information that is the "representation of management" and express no opinion or assurance on the statements. Compilations don't require inquiries of management or analytical procedures. Instead, we rely on our knowledge of accounting principles and a general understanding of your business.
A few banks and some bonding companies accept CPA compilations. We sometimes even do these when we help clients keep their books. See also
QB Accounting.
