Audit, Review and Compilation Services are provided by RAPHAEL OKOYE, CPA, a full service public accounting firm and a sister concern firm of RCM Tax Services, Inc.
Audit
We offer audit of financial statements to our qualified clients. An audit is the examination of the financial report of an organization by a certified public accountant(s). A financial report includes the balance sheet, income statement, statement of changes in equity, cash flow statement, and notes summarizing the business’ essential accounting policies and other explanatory notes.
An audit serves one purpose. This is to evaluate the accuracy of the information exhibited in the financial report, checking whether such information truly reflects the organization’s financial positions at a certain date or period. When examining the financial report, we must follow certain auditing standards which are set by authoritative various bodies. Once we have completed the audit work, we write report (s) explaining what we have done and giving an opinion drawn from our audit work.
Review
Reviewed Statements require that we perform inquiry and analytical procedures in addition to the procedures described above for a compilation. Upon completion of the necessary procedures, we issue a report stating that a review has been conducted in accordance with AICPA professional standards; that the review conducted has a lesser scope than an audit; and that we did not find any material modifications which should be made for the statements to conform with generally accepted accounting principles or with any other comprehensive basis of accounting, if applicable. This is known as the expression of “limited assurance.” Reviewed financial statements are often prepared for entities with bank loans, trade creditors or outside investors yet audited statements are not required by such third parties.
Compilation
Compiled Financial Statements are regarded as the most basic service CPAs provide in terms of financial statements. In a compilation, the CPA must comply with certain basic requirements of professional standards, such as having a knowledge of the client’s industry and applicable accounting principles, having a deep and clear understanding with the client about the services to be provided, and going through the financial statements to check whether there are any obvious departures from generally accepted accounting principles (or, in some cases, another comprehensive basis of accounting used by the entity). A CPA may need to render “other accounting services” – such as creating a general ledger, or assisting the client with adjusting entries for the books – prior to the preparation of the financial statements. Upon completion of the necessary procedures, a report on the financial statements is issued stating that a compilation has been conducted in accordance with AICPA professional standards, but there is no expression of assurance that the statements conform with generally accepted accounting principles. This is known as the expression of “no assurance.” Compiled financial statements are often prepared for privately held entities that do not need a higher level of assurance expressed by the CPA.
