Audit Services
In an audit, we perform an examination of the financial statements that allows us to express an opinion as to whether the financial statements are fairly stated. Our work includes assessing internal controls, testing of selected transactions, and communication with third parties. Based on our findings, we issue a report on whether the financial statements are fairly stated and free of material misstatements.
All public companies are required to have an annual audit, but some nonpublic entities must undergo an annual audit as well. These include local governments, not-for-profit agencies and other organizations receiving government grants.
Moreover, some financial institutions require audits of nonpublic companies based on the financing amount and/or the bank's assessment of the company's risk. Also, companies with absentee ownership (such as those owned by investment firms, or individuals who no longer run the business) may order audits as checks of their management teams.
Review Services
A review engagement consists primarily of performing analytical procedures that we apply to the financial statements, and various inquiries we make of your company's management team. If the financial statements or supporting information appear inconsistent or otherwise questionable, we may need to perform additional procedures.
A review is substantially less in scope than an audit in accordance with generally accepted auditing standards. Since a review is less in scope than an audit, we issue a review report which expresses limited assurance in the form of the statement: "We are not aware of any material modifications" for the financial statements to be in conformity with the Generally Accepted Accounting Principles (GAAP). Reviewed financial statements must include all required footnotes and other disclosures.
Why might a business request a review engagement? Lenders in our service area often require reviewed financial statements to be provided each year. It can be a good middle ground, providing the advantages of a CPA's technical expertise without the expense of an audit.
Compilation Services
In compiling financial statements for a client, we present information that is the "representation of management" and expresses 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.
Banks often require compilations from an independent CPA as part of their lending covenants.
Which Report Should You Use?
Each type of financial statement report may suit specific circumstances, depending on requirements from your bank or other parties, as well as meet budgetary needs.
Quality Control
Dawson, Smith, Purvis & Bassett is a member of the American Institute of Certified Public Accountants' (AICPA) Quality Review Program. We adhere to the AICPA's high quality control program and undergo a rigorous peer review by an outside accounting firm on a regular basis.
