WEALTH n. an abundance of valuable resources.
CATALYST n. an agent that provokes/speeds significant change/action
David Scolamiero
Certified Public Accountant
and
Consultant
4445 Corporation Lane
Virginia Beach, VA 23462
757-285-7272
757-687-0702 fax
dscolamiero@hotmail.com
Auditing and Assurance
David Scolamiero, CPA has been performing auditing and assurance services to successful organizations since 1991. Value is provided by effectively and efficiently communicating information to stakeholders.
Shareholders, creditors, and other stakeholders often need assurance from CPA firm's that deliver credibility, objectivity, and insight to your financial reporting.
We provide different levels of assurance when associated with clients financial statements. Audits give the highest level of assurance, followed by a review, while compiled financial statements have the lowest level of assurance.
The level of service is determined by client needs, and what your creditors and/or investors require. The higher the level of service required, the more time needed to complete the engagement and therefore the more costly the engagement.
Audit
What is an Audit?
Auditing is an independent examination of an enterprise's financial records. Historically, the word ‘auditing’ has been derived from Latin word “audire” which means “to hear”.
An audit involves performing procedures to obtain evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
The objective of an audit is the expression of an opinion about whether client's financial statements are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles. Procedures include tests of documentary evidence supporting the transactions recorded in the accounts, tests of the physical existence of inventories, and direct confirmation of certain assets and liabilities by correspondence with selected customers, creditors, and financial institutions.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
The audit provides reasonable assurance about whether the financial statements are free of material misstatement, whether from (1) errors, (2) fraudulent financial reporting, (3) misappropriation of assets, or (4) violations of laws or governmental regulations that are attributable to the entity or to acts by management or employees acting on behalf of the entity.
Review
What is a Review?
Reviewed financial statements provide the user with comfort that based on the accountant’s review, the accountant is not aware of any material modifications that should be made to the financial statements in order for the statements to be in conformity with the applicable financial reporting framework.
A review engagement involves the CPA performing procedures (primarily analytical procedures and inquires) that will provide a reasonable basis for obtaining limited assurance that there are no material modifications that should be made to the financial statements in order for them to be in conformity with the applicable financial reporting framework.
In a review, the CPA designs and performs analytical procedures, inquiries, and other procedures, as appropriate, based on the accountant’s understanding of the industry, his or her knowledge of the client, and his or her awareness of the risk that he or she may unknowingly fail to modify the accountant’s review report on financial statements that are materially misstated. A review does not contemplate obtaining an understanding of the entity’s internal control; assessing fraud risk; testing accounting records; or other procedures ordinarily performed in an audit.
Compilation
What is a Compilation?
Compiled financial statements represent the most basic level of service CPA's provide with respect to financial statements. In a compilation engagement, the accountant assists management in presenting financial information in the form of financial statements without undertaking to obtain or provide any assurance that there are no material modifications that should be made to the financial statements.
In a compilation, the CPA must comply with Statements on Standards for Accounting and Review Services (SSARSs) which requires the accountant to have an understanding of the industry in which the client operates, obtain knowledge about the client, and read the financial statements and consider whether such financial statements appear appropriate in form and free from obvious material errors.
A compilation does not contemplate performing inquiry, analytical procedures, or other procedures ordinarily performed in a review; or obtaining an understanding of the entity’s internal control; assessing fraud risk; or testing of accounting records; or other procedures ordinarily performed in an audit.
The CPA issues a report stating the compilation was performed in accordance with Statements on Standards for Accounting and Review Services; and that the accountant has not audited or reviewed the financial statements and accordingly does not express an opinion or provide any assurance about whether the financial statements are in accordance with the applicable financial reporting framework.
Which Report is Right for You?
Each type of financial statement report may suit specific circumstances, depending on requirements from your bank, other parties, as well as your budgetary needs.
Please contact our office to help you understand each report's unique characteristics and help you choose the most appropriate one.ss
