Compilation and Preparation

In a preparation of financial statements engagement, LerroSarbey assists our clients in producing internal financial statements. This can be helpful for management with regards to their need for obtaining financial information for their internal use.

During a compilation engagement, however, we also apply our accounting and reporting expertise to assist management in the presentation of financial statements suitable for use by external financial statement users. Unlike a preparation engagement, a compilation engagement results in a report from LerroSarbey explaining the limits and scope of the procedures performed. Because of the limited scope of compilation procedures, LerroSarbey’s report will not express an opinion or provide any assurance regarding the financial statements.

Review Engagements

A review engagement is conducted to provide limited assurance that there are no material modifications that should be made to the financial statements for them to be in conformity with the financial reporting framework. Review engagements generally involve making inquiries of management regarding their accounting practices as well as performing certain analytical procedures. Unlike an audit, a review engagement provides “negative” assurance to the reader of the financial statements, since we do not perform many of the procedures performed in an audit and therefore cannot express an opinion on the fairness of the financial statements taken as a whole.

Audit of Financial Statements

A financial statement audit examines a company’s financial statements and disclosures and provides an objective review of the company’s finances. An audit is not necessarily a negative occurrence – the process tends to strengthen a company’s discipline towards improving internal control over their finances.

Auditing procedures are governed by the AICPA in accordance with generally accepted accounting principles (GAAP). The scope of the procedures can be limited where materiality considerations permit, but audit procedures generally include:

  • The testing and analysis of internal accounting controls.
  • The evaluation of financial statement risks and materiality.
  • The verification of amounts through correspondence with third parties.
  • The examination of third-party documentation for transactions.

The resulting report attests to the fairness of those financial statements and related disclosures and offers an opinion from the auditor that states that the financial statements – including the entity’s assets, liabilities, net assets, revenues, expenses, cash flows, and note disclosures – are fairly presented.

The audit and report the auditor issues is the highest degree of service provided by a CPA. LerroSarbey is a peer reviewed CPA firm, and our work is of the highest quality and our staff is made up exclusively of experienced professionals. We do not employee any ‘entry level’ auditors.