Creditors often need assurance that the financial statements accurately represent the true financial position of a church. Your board members and creditors have different levels of risk tolerance, so we provide three levels of assurance to meet your needs. Understanding each report's unique strengths and weaknesses can help you choose the most appropriate one.
An audit provides the highest level of assurance. An audit is a methodical review and objective examination of the financial statements, including the verification of specific information as determined by the auditor or as established by general practice.
Our work includes a review of 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.
An audit allows you to...
- Satisfy stakeholders such as board members and creditors as to the credibility of published information.
- Facilitate the payment of payroll and other taxes on-time and accurately, thereby avoiding interest, penalties, and investigations.
- Comply with banking covenants.
- Help deter and detect material fraud and error.
- Facilitate the expansion process.
Here's what you get:
- We 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.
- We take the initiative to contact external parties like banks and attorneys so you don’t have to!
Less extensive than an audit, but more involved than a compilation, a review engagement consists primarily of analytical procedures we apply to your financial statements and inquiries of your church’s 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 church’s internal controls or verify data with third parties or physically inspect assets. Rather, a review report 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? Reviews provide a nice middle ground between expertise and expense. You receive the advantages of a CPA's technical expertise without the work and price of an audit.
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.