Audit & Assurance

An audit is the highest level of assurance that we can provide with regard to an organization's financial statements and disclosures. The objective of an audit is to express an opinion on the fairness with which the financial statements present, in all material respects, financial position, results of operations, and cash flows of an organization in conformity with generally accepted accounting principles. Among other things this involves an understanding of an organization's internal control environment, management philosophy, organizational structure, ethical values and integrity. Typical audit procedures might include: confirmations with third parties, tests of transactions, analytical review procedures and discussions with management. Generally, audits are performed because they are required by a lender, regulatory agency such as the state or federal government, or by stockholders/members of the company or organization.

Review

A review consists of applying analytical procedures and making inquiries of persons responsible for financial, accounting, and operational matters. A review does not typically include tests of the underlying accounting records, and is significantly less in scope than an audit engagement. The objective of a review is to provide negative assurance that nothing came to our attention during our procedures that caused us to believe that the financial statements were not presented in accordance with generally accepted accounting principles.

Compilations

A compilation of financial statements is defined in SSARS No. 1, AR 100.04, as follows:

Compilation of Financial Statements: Presenting in the form of financial statements information that is the representation of management (owners) without undertaking to express any assurance on the statements.

When McLain, Calhoun, McCullough, Clark & Co., P.C. compiles financial statements, we will gain a general understanding of the nature of the entity’s business transactions, the form of its accounting records, the stated qualifications of its accounting personnel, the accounting basis on which the financial statements are to be presented, and the form and content of the financial statements. On the basis of that understanding, we will then consider whether it will be necessary to perform other accounting services, such as assistance in adjusting the books or consultation on accounting matters.