Accounting News and Notes

Atlanta CPA: Should Your Company Have an Audit, Review or Compilation?

Need Help With Your Atlanta Financial Statements or Bookkeeping? 

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The below is a sample letter we might get from a company seeking to know if they should have an audit, review or compilation. Be sure you make a wise and informed decision before you select an option that either may be more than you need or not enough.

John,
Hope all is going well.  I am looking to get a quote from a couple people to do a reviewed set and/or an audited set of financials for the company I work for.  What would you need from us to give us a quote?  The financials should be fairly easy.  The company has been in business since 2009. 

Below is my response:

If perhaps the client would be inclined to work with a compilation rather than a review or an audit (which are both substantially more expensive). Frequently a compilation will provide substantive ability for the business owner to accomplish their goals. 

As all clients are different in their complexity and organization and a CPA would need to address their financial needs. Under separate cover I will send you some information on the different reports, and their varying requirements.

Please do not hesitate to call might you have any further questions.

John Dillard is an Christian Speaker/Author and Certified Public Accountant. To See how he takes Christ along with him to work visit http://www.hiscpa.com/  or all John Dillard CPA today at 770.814.9304 Serving Metro Atlanta for over thirty years.

For those seeking advice on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Back Taxes, Business Acquisitions/Sales, Forensic Accounting, Business Valuations and Bookkeeping

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Atlanta CPA: Should You Use A Compilation, Review or Audit 

Providing Atlanta Bookkeeping & Atlanta Financial Statement Insights to Atlanta Business Owners for Decades

Though you can get a CPA Audit done on your company. An audit is approximately four to five times more expense than a compilation. Frequently a banker or outside investor can be satisfied without having to go through the full expense of an audit. Knowing when to use which and the nuances thereof will do much to help ensure that you do not incur unnecessary business expenditures. 

There are three levels of attestation services a CPA may provide when evaluating your business’s internal financial statements. An informed understanding of each of the three substantially varying levels of service an outside CPA may provide will assist you in knowing which is best suited to your particular needs. Several examples of the varying degrees of need will be noted in each of the levels described. 

Understanding the reporting standard that meets the needs of management, investors, bankers, owner, the SEC, and other regulatory governing agencies. Although there is some discretion in the specific application of rules, guidelines, FASB’s (Financial Accounting Standards Board) pronouncement and other governing rulings, much of what a CPA is required to do for the varying levels of service are indeed mandated by the AICPA (American Institute of CPA’s). 

Reporting procedures is largely intended to give the public at large standards by which CPA’s are to govern their personal as well as professional ethics and standards in both the completion of attestation services and their reporting. 

Reviews 

Predominantly of an assessment of the company’s books and records by the performance of analytical tests, certain analytical procedures (such as the comparison to prior books and records), and calculation of certain financial tests and ratios. There procedures, by their very nature are intended to give reasonable assurance to an outside reviewer, rather than the detailed verification and reporting requirements required by an audit. Reviews are frequently requested by banks or insurance companies issuing performance bonds who want a higher degree of service/verification than a compilation, which is discussed next, but not the full extent and cost of an audit. Reviews typically also include a statement of changes in financial position as well as detailed footnotes. 

Frequently a Compilation prepared by a CPA is a much better option that either a review or an audit as it is dramatically less expensive and is frequently more than sufficient to accomplish required needs. Working closely with your CPA to determine this is essential to a wise and prudent choice. 

At HIS CPA, P.C. we strive to be an integral part of your management team. By keeping you better informed of your options and tax laws that affect you and your business, we remain poised to assist you as you work to successfully manage your business. Having served as a CPA in Atlanta for decades I have learned that collecting all of the information available is essential to prudent decision making. Be sure you find a CPA who cares about you as a person, more than he does about you as a client. 

John Dillard is an Christian Speaker/Author and Certified Public Accountant. To See how he takes Christ along with him to work visit http://www.hiscpa.com/  and for his latest book Overcoming Life’s 9/11’s: Job’s Journey  or all John Dillard CPA today at 770.814.9304 Serving Metro Atlanta for over thirty years. 

 Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!

Award Winning Atlanta CPA: Understanding Reviews

Though you can get a CPA Audit done on your company. An audit is approximately four to five times more expense than a compilation. Frequently a banker or outside investor can be satisfied without having to go through the full expense of an audit. Knowing when to use which and the nuances thereof will do much to help ensure that you do not incur unnecessary business expenditures.

Predominantly there are three levels of attestation services a CPA may provide when evaluating your business’s internal financial statements.  An informed understanding of each of the three substantially varying levels of service an outside CPA may provide will assist you in knowing which is best suited to your particular needs.  Several examples of the varying degrees of need will be noted in each of the levels described. 

Seeking out the reporting standard that meets the needs of management, investors, bankers, owner, the SEC, and other regulatory governing agencies.  Although there is some discretion in the specific application of rules, guidelines, FASB’s (Financial Accounting Standards Board) pronouncement and other governing rulings, much of what a CPA is required to do for the varying levels of service are indeed mandated by the AICPA (American Institute of CPA’s). 

Procedures and reporting is largely intended to give the public at large standards by which CPA’s are to govern their personal as well as professional ethics and standards in both the completion of attestation services and their reporting.

Reviews

A review consist predominantly of an assessment of the company’s books and records by the performance of analytical tests, certain analytical procedures (such as the comparison to prior books and records), and calculation of certain financial tests and ratios.  There procedures, by their very nature are intended to give reasonable assurance to an outside reviewer, rather than the detailed verification and reporting requirements required by an audit.  Reviews are frequently requested by banks or insurance companies issuing performance bonds who want a higher degree of service/verification than a compilation, which is discussed next, but not the full extent and cost of an audit. Reviews typically also include a statement of changes in financial position as well as detailed footnotes.

At HIS CPA, P.C. we strive to be an integral part of your management team.  By keeping you better informed of your options and tax laws that affect you and your business, we remain poised to assist you as you work to successfully manage your business. Having served as a CPA in Atlanta for decades I have learned that collecting all of the information available is essential to prudent decision making. Be sure you find a CPA who cares about you as a person, more than he does about you as a client.

John Dillard is an Christian Speaker/Author and Certified Public Accountant. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey or call John Dillard CPA today at 770.814.9304 Serving Metro Atlanta for over thirty years.

 Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!