Audits, Reviews & Compilations in Seattle, WA
At Watson McDonell, we provide constructive solutions for maximizing your organization's resources and efficiency.
The board of directors, creditors, and governmental agencies often need assurance that the financial statements accurately represent the true financial position and activities of an organization. Your board of directors and funding sources may have different levels of risk tolerance, so we provide three levels of assurance to meet your needs.
Audit - Highest Level of Assurance
An audit provides the highest level of assurance; it is a methodical and objective examination of the financial statements based on risk. An audit includes a review of internal controls, testing of selected transactions, and third-party verification of specific information. Based on our findings, we issue a report as to whether the financial statements are fairly stated and free of material misstatements.
Review - Limited Assurance
A review report expresses limited assurance in the form of the statement: "We are not aware of any material modifications" for the financial statements to be in conformity with the Generally Accepted Accounting Principles (GAAP). Less extensive than an audit, a review engagement consists primarily of analytical procedures and various inquiries of your company's management team. If the financial statements or supporting information appear inconsistent or otherwise questionable, additional procedures may be necessary. Reviewed financial statements must include all required footnotes and other disclosures.
Why might a business request a review engagement? It can be a good middle ground, providing the advantages of a CPA's technical expertise without the work and expense of an audit.
Compilation - Lowest Level of Assurance
In compiling financial statements for a client, we present information that is the "representation of management" and express no opinion or assurance on the statements. Compilations don't require inquiries of management or analytical procedures. Instead, we rely on our knowledge of accounting principles and a general understanding of your business.
Which Report Should You Use?
Each type of financial statement report may suit specific circumstances, depending on requirements from your client's bank or other parties, as well as meet budgetary needs.
Understanding each report's unique strengths and weaknesses can help you choose the most appropriate one. Please call if you have questions about which type of report is right for you.