Improving the quality of your information
Financial data is just one element of making wise business decisions. Assurance is the process of adding to the financial data for a complete picture based on your business objective. Recent events and subsequent congressional legislation (Sarbanes-Oxley, HIPAA, etc.) have significantly affected the duties and accountabilities of owners, CEOs, CFOs and CPAs in regard to the privacy, integrity, accuracy and completeness of the financial information they present. With greater accountability at stake, assurance can protect your company. While the immediate impact has been felt most keenly in the public company arena, there are many indications of "trickle down" to other entities with public responsibility (ex. financial institutions) and even smaller privately held companies. 

An audit is a formal examination of an organization's accounts or financial situation. It is the top level of investigation performed on a business' financial statement. For example, when conducting an audit, the possibility of fraud has to be systematically and thoroughly questioned and analyzed by the auditor/CPA and the officers of the company. 

Often times buyers, investors and lending institutions require an audit to assure that the financial statements conform. If you need a reasonable assurance that financial statements are free of material misstatements, consider obtaining this service. An audit may be required if:

• You are publicly trade
• You are considering going public
• A lender requires one as a condition of the loan
• You anticipate purchasing a business or selling your company
• You receive federal funds and want to preserve integrity 
• There are absentee owners that need assurance of the company operations

Audit Manager, Jerry Murray, starts by understanding your business, the risks you face, and your internal controls. With these elements, he can identify opportunities where your company can increase its efficiency and profitability. 

A review involves inquires and analytical procedures that provide limited assurance that financial statements are fairly presented. Third party sources are used to confirm that the facts are correct. If you need a closer examination of your books but an audit is not required and a compilation is not thorough enough, you should consider a review. A review is a mid-level assessment performed by an independent accountant (not your current CPA). For example, a lender may require a level of comfort for a loan and request that a review be conducted. 

Compilation involves obtaining information from management in an effort to prepare financial statements (without expressing any assurance) that the statements are fairly presented.

There will be times when you need to evaluate your company's performance with the intent of assuring that your business is meeting its financial goals. The compilation is the most basic service we offer and does not express any assurance. Consider obtaining a compilation if you need to have your financial statements put into a format that can be easily read by outside sources. 

For more information regarding assurance, contact Allan Peiser at 972-818-5300, ext. 103 orAPeiser@GPPcpa.com.