Are You Sure an Audit is Necessary?May 19, 2013 - 2 minutes read
Often times we find that performing an audit of a company’s financial statements is not necessary in order to accomplish the objectives of its interested parties. Banks, shareholders and potential investors typically have specific financial condition, operational results requirements, or areas of identified risk for which they want some degree of assurance. Depending upon your company’s situation, there are less costly alternatives to the traditional financial statement audit or review. Some alternatives to be considered:
- Audit, review or compilation of a specified element
- Consulting engagement
- Agreed-Upon Procedures (AUP)
Price CPAs frequently recommends AUP engagements when specified third parties are in need of additional credibility regarding a company’s specific financial or nonfinancial data. From an assurance standpoint, AUP engagements are subject to the attestation standards issued by the AICPA. An AUP engagement is very efficient due to the fact that the only procedures performed are specifically defined by the specified parties and the CPA prior to any work being performed. The CPA’s report findings are specific to the procedures they were engaged to perform. The sufficiency of the AUP procedures is the responsibility of the specified parties, however, if you are unsure of the procedures needed, we will gladly provide suggestions.
Please contact us if your company is being required to provide audited or reviewed financials. It is quite possible that the needs of the users of your financial statements can be met with a less costly alternative. Communication with all interested parties on the front-end would allow us to assist you with establishing the specific level of service that is needed. Furthermore, if an AUP engagement is appropriate, we suggest an initial meeting to clear up any ambiguities and suggest alternatives with more efficient or less costly procedures that could be substituted.
Alan Webb – Certified CPA & CVA.
Price CPAs, PLLC
3825 Bedford Ave. Suite 202
Nashville, TN 37215
Price CPA’s is a Nashville based CPA firm that provides professional services to you in both your personal and business life. We’ll help you determine the right tools and information necessary to help you succeed.