Certified Financial Statement Audits, Reviews & Compilations

At our firm we have experience providing certified financial statement audits, reviews & compilations services for businesses, not-for-profit organizations, and government agencies.

Someday your organization may be required to get a CPA certified Financial Statement Audit, Review or Compilation. Your organization’s accounting and financial statement reports (balance sheet, income statement, statement of retained earnings and cash flows) needs to be ready.

Audit Readiness- your business or organization’s accounting and reports should be up to date and in compliance with Generally Accepted Accounting Principles “GAAP” (most sort out financial reporting framework) or any other required financial reporting framework. Also, your records, documents, explanation or other information including significant judgements are to be complete, accurate and satisfactory. Additionally, your organization or business may need to report on supplementary information.

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To be audit ready sometimes company’s and nonprofit organizations hire us to provide non-attest services. These services help with being GAAP compliant and consist but are not limited to the following:

Cash to accrual accounting method conversion
Financial statement preparation
Financial statement disclosures
Bank reconciliation and bookkeeping
Deferred tax calculation
Fixed asset reporting and recording of depreciation
Construction in progress adjustments
Payroll reconciliations

Types of Reports

Compilation (no assurance):

Is the application of accounting and financial reporting expertise to assist management in the preparation of financial statements. There is no requirement to verify the accuracy or completeness of the information provided by management or otherwise gather evidence to express an opinion or a conclusion on the financial statements. Therefore, no level of assurance is expressed on a compilation report. For a CPA to issue an independent compilation financial statement report, the accountant needs to be independent. Independence enhances the accountant’s ability to act with integrity and be objective. Interesting enough a CPA can issue a non-independent compilation report and some third parties will accept these reports. We perform compilation on financial statements and if needed, on supplemental information.

We also provide compilation reports on financial statements like forecasts or projections with predictive information.

Forecasts are predictive information with normal business operating conditions.
Projections are predictive information with a hypothetical assumption thrown into the mix.

Review Engagement– (limited Assurance)

A CPA reviewed financial statement report is intended to provide lenders and other outside parties with a basic level of assurance on the accuracy of financial statements.

The review service is one in which our accountants perform analytical procedures, inquiries and other procedures to obtain “limited assurance” on the financial statements and is intended to provide a user with a level of comfort on their accuracy. The review is the base level of CPA assurance services.

A review is substantially narrower in scope than an audit. A review does not contemplate obtaining an understanding of your business’s internal control; assessing fraud risk; testing accounting records through inspection, observation, outside confirmation or the examination of source documents or other procedures ordinarily performed in an audit.

Audit (assurance)

An audit consists of a methodical review and objective examination of an enterprise’s financial statements. The objective of the auditor’s examination is to express an opinion on the financial statements. This expression takes the form of an audit report.

The financial statements of an enterprise are prepared by the management of the enterprise, not by the independent auditor. Further, the financial statements are the product and property of the enterprise; the independent auditor merely audits and expresses an opinion on them. The expression of an opinion by the independent auditor is known as the “audit function”.

Audit function adds “credibility” to the financial statements. The auditors, as a group independent of management, have an objective view and can report on a company’s activities without bias or conflict of interest. Without a report from an independent auditor, a company’s financial statements would be meaningless, because the public would have little faith in financial statements issued by the inherently biased company.

Most audits are performed not only for the primary benefit of the stockholders, but also for any other interested outside parties.

It is worth noting that many organizations choose to conduct an audit, even when not required by an outside body, to demonstrate good financial stewardship and transparency. A financial statement audit provides management, including those charged with governance, and other financial statement users with an independent CPA’s opinion about whether the financial statements fairly present the entity’s financial statements are in conformity with generally accepted accounting principles (GAAP).

Audits, Reviews & Compilations Experience

Our accountants and auditors have experience providing Audits, Reviews & Compilations in the following industries

Construction:

We are a of a few accounting firms that serve construction contractors. Construction accounting is complex and commercial contractors may be required by a surety to obtain a financial statement prepared by a CPA in order to get a bond to perform a job.

Surety requests supplemental schedules that need to tie back to the financial statements. Below is a list of those potential schedules.

Schedule of general and administrative expenses
Schedule of contract Revenues and Cost of Revenues earned
Schedule of contracts in Progress
Schedule of completed Contracts
Accounts receivable aging
Contract asset and liabilities
Earnings from contracts
Backlog

Early childhood centers:

Our CPA audit services early childhood centers with disabilities, particularly those in New York receiving state funding, specialize in verifying Consolidated Fiscal Reports (CFRs), ensuring compliance with State Education Department (SED) regulations, and reviewing reimbursable costs.

Government Agencies:

We have experience auditing statement of contract status and the related notes. We perform these audits in accordance with government auditing standards. We provide independent auditor’s report on internal control over financial reporting and on compliance and other matters based on an audit of statement of contract status performed in accordance with Government auditing standards.

Not-for-profit:

The New York State Charities Bureau requires 7A only or DUAL filers to submit an audit if your organization receives total revenue and support greater than $1,000,000. If your organization receives total revenue and supports greater than $250,000 and up to $1,000,000, a review report is required. There are exemptions that can be found in the instructions for the NYS CHAR 500. Receiving federal or state funds over certain thresholds can also trigger audit requirements. Even some foundation grants or loan agreements may have audit requirements. It’s important to understand your organization’s specific circumstances to determine whether you are required to have an audit performed.

Real estate:

Developer hired us to perform an audit on the schedule of construction cost breakdown, for potential tax incentives. The NYC Department of Finance (DOF) requests CPA audit reports, ICAP (Industrial and Commercial Abatement Program), and ICIP (Industrial and Commercial Incentive Program) documentation to verify compliance with construction, expenditure, and M/WBE requirements for property tax benefits. They often require proof of "minimum required expenditures," construction completion, and ongoing, lawful use of the property.

Herman P. Ortiz CPA, head of the audit department, has extensive audit experience prior to starting the firm. Herman audited large commercial construction companies, college A-133 audit, college foundations and early childhood centers, private schools, private equity company, real estate holdings, manufacturers and distributors, specialty cruise liner and an engineering company.

If your business or organization is in need of these services contact us for a consultation