Stockholders, creditors, and private investors often need assurance that the
financial statements accurately represent the true financial position of a company.
Your stockholders, creditors, or private investors have different levels of risk tolerance, so we provide
three levels of assurance to meet your needs.
Compliance Checks - This is our recommendation for MOST churches
An audit provides the highest level of assurance. But, our Compliance Check encompasses many of the same procedures but saves the church thousands of dollars and satisfies most churches
A Compliance check allows you to...
Satisfy all members of the church including the staff and potential new church members
Brings satisfaction to the congregation that the church is above reproach on its business practices and money handling
Brings some accountability to the church from a third uninterested party
Help deter and detect material fraud and error
Obtain the information needed to get in compliance with all State and Federal entities.
Here's what you get...
You get the highest level of assurance because we specialize in churches and not for profit entities. We know what to look for and how to deal with most every aspect of church business. Small and large churches. You will get Best Practice recommendations on each area we check and a thorough management letter at completion.
We also perform physical inspections by observing your money counting methods and perform test counts on previous donor receipts. We document and test each operating cycle, including sales and cash receipts, expenses and cash disbursements, and payroll. Our management letter will include a detailed work program to document the examinations and testings performed.
Audit - Highest Level of Assurance
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 employees, customers, suppliers and pressure groups, as well as the investing community, as to the credibility of published information.
Facilitate the payment of corporate tax, goods and services tax, 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 purchase and sale of businesses.
Here's what you get...
You get the highest level of assurance because we go outside your company to obtain more information. Typically, we'll have written communication with:
Your customers, to check outstanding receivable balances,
Your banks, to confirm cash or debt balances and terms,
Your vendors, to verify outstanding payable balances, and
Your attorneys, for information on pending or threatened legal action.
We also 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.
Audits Not Just for Public Entities
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 - Limited Assurance
Less extensive than an audit, but more involved than a compilation, a review engagement consists primarily of analytical procedures 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 doesn't require us to study and evaluate your company'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? It can be a good middle ground, providing the advantages of a CPA's technical expertise without the work and expense of an audit.
Compilation - Lowest Level of Assurance
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, board, congregation, or other parties, as well as meet budgetary needs.
Understanding each report's unique strengths and weaknesses can help you choose the most appropriate one. Please call 417.863.6303 if you have questions about which type of report is right for you. Our experience for churches in particular is to always start with the Compliance check and go from there.
Whichever report you choose, our staff can typically help you or guide you in the proper ways to correct any issues that may arise.
