Peer Review
Our firm participates in the
AICPA Peer Review Program. The
Mississippi Society of CPAs administers the peer review program in Mississippi. Under the program, each CPA firm with an auditing practice is required to undergo a system review every three years. Each firm that performs compilations and/or reviews is also required to undergo an engagement and/or report review every three years.
Audit - Highest Level of Assurance
An audit provides the highest level of assurance about the reliability of your financial statements. The objective of an audit is to provide a reasonable basis for the expression of our opinion as CPAs on the financial statements taken as a whole. An audit is a methodical 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. In an audit, 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 Large Entities - An audit can be beneficial for your small business. Nonprofit agencies and other organizations often are required by banks or their bylaws to have an annual audit. 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. Pension and profit sharing plans and nonprofit organizations often need audits.
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. The purpose of a review engagement is to provide limited assurance about the financial statements. A review engagement includes various inquiries we make of your company's (or organization'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.
Agreed Upon Procedures Engagement
An agreed upon procedures engagement is not an audit, review or compilation. Rather, its purpose is to report on a subject matter or an assertion about a subject matter. We would perform procedures that would be "agreed upon" with you prior to beginning our work. Attest services involved in this type of an engagement could include looking at a specific area of your business (for example, payroll or inventory or accounts payable).
Other Services
- Personal Financial Statements
- Pension Plan Audits
- Forecasts and projections
- Other Customized Service
Each type of engagement may suit specific circumstances, depending on requirements from your bank or other parties, as well as meet budgetary needs.
