Most likely, your bank or insurance provider will be the one to ask for a CPA to report on your financial statements. Why? Because audited financial statements offer the highest form of assurance in evaluating a business's performance and its debt paying ability.
At MarksNelson, our auditors examine your organization based upon U.S. generally accepted auditing standards (GAAS) and provide a written report that expresses our independent opinion.
We don't stop there. Our auditors look for ways to strengthen your internal controls and increase
efficiencies within your organization.
Why do we take the extra step?
At MarksNelson, auditing isn't just about compliance. It's about helping you move your business forward.
| ||Does your current audit firm have the experience you need? |
| ||Is the level of service and value you receive in line with the price your auditor charged you? |
| | Have more than 100 participants in your employee benefit plan?
Learn how MarksNelson can help you with an ERISA audit
We work with you to determine which report meets the needs of your company, creditors, and investors. Regardless of the type of assurance service performed by our CPAs, we adhere to the strictest professional standards.
Financial Statement Audits
Why choose an audit
Often a third party—a bank or investor—will request an audit because it carries the highest level of assurance that the company's financials are fairly stated.
How an audit works
An independent CPA uses various techniques to verify and substantiate the reliability of the information in the financial statement, including, but not limited to:
| ||Confirming balances in a bank or investment account |
| ||Testing the cost of equipment |
| ||Directly corresponding with creditors, debtors, and/or donors |
| ||Observing physical inventories |
The CPA firm then provides written assurance that financial reports are fairly presented in conformity with "generally accepted accounting principles" (GAAP). The measure for "fairly presented" is that the auditor has planned and performed the audit to obtain reasonable assurance that the financial statements are free of material misstatements.
Financial Statement Reviews
Why choose a review
Many banks want some form of reassurance before lending money, but they also recognize business owners cannot incur the cost of a full audit. Reviews provide a lower degree of assurance than audits.
How a review works
During a review, CPAs make inquiries and perform analytical procedures, which allow them to express limited assurance that they are not aware of any material changes.
For example, in a review, a CPA would likely ask management how inventory quantities are determined. In an audit, the CPA would physically observe the year-end inventory and personally review the obsolete or damaged items.
While a review doesn't provide the same degree of assurance as an audit, some financial statement users may find it an acceptable alternative, especially when it may be combined with agreed-upon procedures.
Financial Statement Compilations
Why choose a compilation
A compilation is useful when a business may need monthly financial statements, has limited in-house capabilities for preparing financial statements, or needs a CPA to prepare the financial statements in the proper format. Prepared from information provided by management, compilations provide the lowest level of assurance.
How it works
Your accountant assists in preparing the financial statements, but it is not obliged to verify the information. Since the information is not verified, the CPA gives no assurance as to whether the financial statements meet the professional standards.
In a compilation, CPAs only agree to demonstrate that they have knowledge of the company's accounting principles and practices. They also make certain that the data are in conformity with GAAP and clerically reliable.