At Caalm Accounting Solutions, we pride ourselves in providing quality audit services to our clients in privately-owned companies. We find that these engagements lead to a long-lasting relationship that is built on trust and allows us a unique position to provide powerful insight that can help in educating business owners in growing and improving their business.
We work with business owners to learn about the business and its risks to customize an audit approach that will identify the important and unique areas of the business. We also utilize technology to work efficiently throughout the audit process, whether it's from your office or ours.
The purpose of an audit is to obtain reasonable assurance that the financial statements as a whole are free from material misstatements, whether due to error or fraud in order to express an opinion that the financial statements are presented fairly in all material respects, in accordance with an applicable financial reporting framework, usually GAAP (generally accepted accounting principles).
Basically what that means, is that we will work with you to review your financial records, perform tests and analytical procedures, send confirmations to banks and customers, make inquiries of you and other key personnel, learn about your business, gain an understanding of your internal controls, and document a lot. This will allow us to opine if your financial statements present what's actually happening in your business with a reasonable level of assurance.
Being the highest level of assurance available for financial statements, it is also the highest level of work required to complete, and therefore the most costly to business owners.
At Caalm Accounting Solutions, we also offer reviewed and compiled financial statement services. These services are not as robust as an audit and therefore do not provide as great a level of assurance on the financial statements.
Where an audit provides "reasonable assurance", reviewed financial statements provide "limited assurance" that the financial statements present what's actually happening in your business. The work required for a review also differs significantly from an audit. Primarily, the completion of review procedures will include inquiries made of business owners and/or accounting personnel and analytical procedures. This is not a comprehensive list, but you can see we won't be testing your financial data, sending confirmations to customers, and other more extensive test work that is required as part of audit procedures.
A compiled financial statement is the outlier and doesn't provide any assurance. The objective here is to assist management in presenting financial information in the form of financial statements that conform to the applicable financial reporting framework. There is more flexibility with a compiled financial statement, for instance, footnote disclosures may be omitted from the financial statement and the CPA is not required to be independent, although this must be disclosed.