Owners, investors, shareholders and creditors require assurance that a company’s financial statements are presented fairly, in all material respects, in conformity with the applicable financial reporting framework. Accordingly, Farber Hass Hurley LLP can provide various levels of assurance to meet the needs of their clients:
Audit – Maximum Level of Assurance
We provide audited financial statements for public and privately-held companies, not-for-profit entities, employee benefit plans, private schools and governmental entities. An audit provides the maximum level of assurance to the user of the financial statements. It involves an examination of the underlying support for significant accounts that constitute the balances in the financial statements. In addition, it provides the user of these financial statements disclosures of the entity’s significant accounting policies and further in-depth detail of the accounts in the financial statements. An audit also considers the entity’s internal controls and identifies material weaknesses and significant deficiencies in the entity’s operations which can lead to fraud and errors. Credit agreements with lenders often require audited financial statements.
Review – Moderate Level of Assurance
Reviewed financial statements are less in scope than an audit. It consists primarily of inquiries and analytical procedures of the accounts that will provide a reasonable basis for obtaining limited assurance that there are no material modifications that should be made to the financial statements for them to be in conformity with the applicable financial reporting framework. A review does not entail examination of the underlying support for significant accounts nor does it evaluate the company’s internal controls and procedures. Many users of financial statements request this level of service for the absentee owners, parent company, the bank or investors when they are comfortable with the Company’s operations and desire a moderate level of assurance from an independent CPA firm.
Compilations – Minimum Level of Assurance
Compilations are the most basic level of service that CPAs provide to their clients with respect to financial statements. In a compilation engagement, we assist management in presenting financial information in the form of financial statements in accordance with Accounting Principles Generally Accepted in the United States. We take no responsibility for their accuracy or completeness. However, we must have an understanding of the entity’s industry, obtain knowledge about the entity, and consider whether the compiled financial statements appear appropriate in form and free from obvious material errors. This service is often acceptable to banks from their customers.