We understand that many business owners may not truly understand what goes on behind the scenes when we provide our services. As such, we will describe each service below along with our process for each.

Assurance

Assurance engagements are designed to provide varying levels of assurance on historical financial data. A description of each is as follows:

Audit
An audit provides reasonable, but not absolute assurance that the financial statements are not materially misstated in accordance with a financial reporting framework. Audit procedures consists of examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; therefore, an audit will involve judgment about the number of transactions to be examined and the areas to be tested. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

In an audit, we test significant (i.e. large) balance sheet line items (e.g. accounts receivable, property and equipment, notes payable, etc…) and transactions (e.g. sales, expenses, etc…). We often perform multiple procedures on each depending upon the risk that there may be a misstatement due to error or fraud. Each would typically be subject to analytical procedures and substantive procedures (i.e. confirmation of amounts to third party documents or directly with a third party). The extent of substantive procedures depends on the significance of the account and the number of transactions that make up the balance. We would also test management’s estimates (e.g. depreciation, amortization, allowance for doubtful accounts, impairment, etc…) through recalculation or our own independent analysis. In an audit, we are also required to understand the company, its internal controls over financial reporting (i.e. policies and procedures) and to test the design (how well they are structured) and operating (how well they are working) effectiveness.

The end result of an audit is the issuance of our report, which is our responsibility. The financial statements are management’s responsibility.

Review
A review provides limited assurance that the financial statements are not materially misstated in accordance with a financial reporting framework. A review includes primarily applying analytical procedures to your financial data and making inquiries of Company management. A review is substantially less in scope than an audit. A review does not contemplate obtaining an understanding of the Company’s internal control; assessing fraud risk; testing accounting records by obtaining sufficient appropriate audit evidence through inspection, observation, confirmation, or the examination of source documents (for example, cancelled checks or bank images); or other procedures ordinarily performed in an audit. Accordingly, a review report will not express an opinion regarding the combined financial statements as a whole.

In an review, we perform analytical procedures and make inquiries of management on balance sheet line items that changed significantly from prior years, as well as, significant transactions. We do not typically test the details of these balances or transactions like we would in an audit. We would also not confirm amounts with third parties and document or test internal controls.

The end result of a review is the issuance of our report, which is our responsibility. The financial statements are management’s responsibility.

Compilation
A compilation provides no assurance that the financial statements are not materially misstated in accordance with a financial reporting framework. A compilation differs significantly from a review or an audit of financial statements. A compilation does not contemplate performing inquiry, analytical procedures, or other procedures performed in a review. Additionally, a compilation does not contemplate obtaining an understanding of the company’s internal control; assessing fraud risk; testing accounting records by obtaining sufficient appropriate audit evidence through inspection, observation, confirmation, or the examination of source documents (for example, cancelled checks or bank images); or other procedures ordinarily performed in an audit. Accordingly, a compilation report will not express an opinion or provide any assurance regarding the financial statements being compiled.

Preparation
Preparation services are just that, we prepare the company’s or organizations financial statements on plain paper, with or without a statement of cash flows or footnotes based on information provided to us by management. This is a non-attest service and provides no assurance and does not include a report from us. This service is typically provided in conjunction with the above services or as a stand-alone service commonly referred to as “write-up” services.

Attest

Similar to its assurance counterparts, attest services provide varying levels of assurance on data other than financial statements. Attest engagements can cover a wide range of subject matters including, but not limited to: compliance with laws and regulations, cost allocations, costs basis for tax credits, pro formas, projections, and forecasts.

Examination
An examination provides reasonable, but not absolute assurance that the subject matter is not materially misstated. Examination procedures consists of a detailed inspection, on a test basis, of evidence supporting the subject matter; therefore, an examination will involve judgment about the number of transactions to be audited and the areas to be tested.

Review
A review provides limited assurance that the subject matter is not materially misstated. A review includes primarily applying analytical procedures to the subject matter and making inquiries of Company management. A review is substantially less in scope than an examination. A review does not contemplate obtaining an understanding of the Company’s internal control; assessing fraud risk; testing the subject matter by obtaining sufficient appropriate audit evidence through inspection, observation, confirmation, or the examination of source documents (for example, cancelled checks or bank images); or other procedures ordinarily performed in an examination. Accordingly, a review report will not express an opinion regarding the subject matter.

Agreed upon procedures
In an agreed upon procedures project, a CPA agrees to perform an agreed to set of procedures on a subject matter. No other procedures are performed and no opinion is expressed on the subject matter.

Compilation
A compilation provides no assurance that the subject matter is not materially misstated. A compilation differs significantly from a review or an examination. A compilation does not contemplate performing inquiry, analytical procedures, or other procedures performed in a review. Additionally, a compilation does not contemplate obtaining an understanding of the company’s internal control; assessing fraud risk; testing the subject matter by obtaining sufficient appropriate audit evidence through inspection, observation, confirmation, or the examination of source documents (for example, cancelled checks or bank images); or other procedures ordinarily performed in an audit. Accordingly, a compilation report will not express an opinion or provide any assurance regarding the financial statements being compiled.