Financial Statement Audits
An audit provides the highest level of assurance...
Financial statement audits involve a thorough examination of a company's financial records, ensuring credibility, transparency and accuracy of the entity's financial position. This service is essential for organizations seeking to establish trust with stakeholders, comply with legal and regulatory requirements, and understand their financial performance. Conducted by certified public accountants (CPAs), audits verify that financial statements are free from significant errors and adhere to accounting standards like GAAP and IFRS.
Reviews & Compilations
Reviews
A review provides a lower level of assurance than an audit and consists of discussions with management and analytical procedures applied to financial data. The accountants' report provides limited assurance.
A business financial review is a limited assurance service that involves performing analytical procedures and making inquiries to ascertain the plausibility of financial information. Unlike a full audit, a financial review is less intensive but still provides valuable insights into the financial health of an organization.
This service is ideal for businesses that do not require a comprehensive audit but still need a professional opinion on their financial statements.
Compilations
A compilation provides the lowest level of assurance and consists of preparing statements from information provided by the company. The accountant’s report states that we have not performed an audit or review and that no assurance is being provided.
Unlike audits or reviews, compilations do not provide assurance on statement accuracy or evaluate internal controls. Instead, the accountant relies on information provided by the company's management to prepare the financial statements.
Businesses often use compiled financial statements to furnish financial information to lenders, investors, or other external parties, offering a more cost-effective option compared to audits while still inspiring confidence in the reliability of the financial data.
Agreed Upon Procedures
Procedures…
Principles...
Procedures…
- The practitioner's role is to carry out the procedures and report the findings.
- The practitioner assumes the risk that the procedures may be misapplied or that appropriate findings may not be reported.
- The specified parties assume the risk that the procedures may be insufficient, misunderstand or inappropriately used.
- The practitioner can
- The practitioner's role is to carry out the procedures and report the findings.
- The practitioner assumes the risk that the procedures may be misapplied or that appropriate findings may not be reported.
- The specified parties assume the risk that the procedures may be insufficient, misunderstand or inappropriately used.
- The practitioner can help develop the procedures, but the engaging party must agree to the procedures and acknowledge their appropriateness.
Examples…
Principles...
Procedures…
- Due diligence: Targeted checks to verify compliance with agreements during a business sale, acquisition, or merger
- Contract compliance analysis: Ensuring compliance with specific contractual terms
- Internal controls review: Reviewing internal controls
Principles...
Principles...
Principles...
- Integrity
- Objectivity
- Professional Competence
- Due Care
- Confidentiality
- Professional Behavior
- Technical Standards