Assurance
Compilations
Whenever a business needs a bank loan, that bank will typically require assurances that the financial statements provided are accurate and complete. They want to know that the company with which they are considering loaning money is profitable, trustworthy, and professional. A compilation cover page, when associated with financial statements, shows these lending institutions that your company is connected to a CPA firm. This does not mean that the CPA firm provides any type of assurance to the financial statements being provided, merely that the client has association with the accountant providing the compilation.
Compilation documents provide enough assurance to many local banks and lending institutions. Larger national banks usually require a more thorough assurance. This may be provided via a review or audit as the lending institution requires. While compilation cover pages can work for many applications, it sometimes does not provide enough assurance for some lenders that your accounting records are accurate. To provide an added level of assurance accounting, reviews and audits are essential.
Reviews
Review your business accounting practices and procedures to ensure compliance with GAAP. The review process at North Star Tax & Accounting consists of three basic parts:
- The first part is the review of financials. We take a more in depth look at your inquiries and financials to ensure they are accurate and up to date.
- Once we are assured your financials are correct, we make sure they are in accordance with GAAP best practices for your industry and businesses type.
- After assurance of GAAP compliance, we then review prior years and the current year analytical comparisons to ensure nothing is out of the ordinary.
To make the process go smoothly, North Star Tax and Accounting will go over the required financial documents required for your review. We will require these documents to be provided prior to the review process commencing.
Audits
We can help with internal and external audits. The highest level of assurance offered through North Star Tax & Accounting is an audit. During a proper audit, we will review your company’s internal control procedures, assess the likelihood of fraud in association with your financial statements and provide assurances that the necessary inspections, evaluations, and testing have been conducted.
Due to the intensity of audits, we work closely with you throughout the process. The required documentation can be extensive and can take some time to gather. To complete a successful audit, we’re required to compile evidence through personal inquiries, workplace visits, physical inspections, employee interviews, and other verification and testing procedures.
Audits are used to ensure your financial statements and records are free from errors and fraud. A high-level assurance provided by an audit can be required for many reasons. Whether you’re being audited to secure a large amount of financing, a government entity may assume control in the future, trying to raise equity in a business, looking to purchase a business, anticipating an initial public offering or you are interested in selling your business, our team will thoroughly conduct your audit.
Agreed Upon Procedures
North Star’s Agreed Upon Procedure (AUP) engagements involve an accountant performing specific procedures on subject matter and reports on the factual findings of these procedures, without expressing an opinion or assurance. AUPs are usually less costly than reviews or audits, and can dig into non-financial matters like internal control evaluations, spending practices, construction project process or loan covenant compliance.
The AUP report will be from an independent accountant, identify the parties involved, the purpose of the engagement and include reservations or restrictions concerning the procedures or findings, but without any opinion.