1801 Century Park East, 25th Fl
Century City, CA 90067
(833) 829 - 5455
What You Need To Know
How we do business:
Our fee for financial statement preparation, compilation, review and audit services, is based upon a percentage of your gross income for a calendar or fiscal year. That percentage will be based upon the type of service you require. Either a compilation, review, or an audit.
If you cannot produce foundational accounting records, such as posting journals, check registers, a general ledger, a profit & loss statement, a balance sheet, a cash flow statement, a retained earnings statement or a statement of changes in fund balance; you will need to have a forensic records reconstruction done, before any attest services will be provided. The fee for this service is again, a percentage of your gross revenues from all sources.
Factors that may impact your fee are, if you have a full-time accountant or bookkeeper, and if you can produce timely financial reports. The Internal Revenue Service in publication 583 spells out and explains why you must keep records, what kinds of records you must keep and how to keep them. It also explains how long you must keep your records for federal income tax purposes and compliance issues.
Once a fee is agreed upon, an engagement letter will be drafted, indicating the scope of work to be done. With the signing of the engagement letter, an initial 50% deposit is required, payable to Marshall Campbell & Co., CPA’s. All payments are payable via wire transfer, cashiers check or direct deposit.
Once the engagement is confirmed, we’ll initiate the planning and execution of the audit or review process. Our team will provide a detailed list of required documentation and begin gathering the necessary information to support verifiable audit evidence. Audits and reviews are typically completed within 2 to 6 months, depending on the scope and your responsiveness to document requests. If you require expedited delivery, a 50% premium will apply for accelerated turnaround.
IMPORTANT:
FOR CLIENTS SUBJECT TO THE LANTERMAN ACT.
California Welfare & Institutions Code Section 4652.5
(a)(1)
An entity (provider) that receives payments from one or more regional centers shall contract with an independent accounting firm to obtain an independent audit or independent review report of its financial statements relating to payments made by regional centers, subject to both of the following:
(A)
If the amount received from the regional center or regional centers during each state fiscal year is more than or equal to five hundred thousand dollars ($500,000), but less than two million dollars ($2,000,000), the entity shall obtain an independent review report of its financial statements for the entity's fiscal year that includes the last day of the most recent state fiscal year.
(B)
If the amount received from the regional center or regional centers during each state fiscal year is equal to or more than two million dollars ($2,000,000), the entity shall obtain an independent audit of its financial statements for the entity's fiscal year that includes the last day of the most recent state fiscal year.
An entity subject to subdivision (a) shall provide copies of the independent audit or independent review report required by subdivision (a), and accompanying management letters, to the vendoring regional center within nine months of the end of the entity's fiscal year.
(c)
Regional centers that receive the audit or review reports required by subdivision (b) shall review and require resolution by the entity for issues identified in the report that have an impact on regional center services. Regional centers shall take appropriate action, up to termination of vendorization, for lack of adequate resolution of issues.
(d) (1)
Regional centers shall notify the department of all qualified opinion reports or reports noting significant issues that directly or indirectly impact regional center services within 30 days after receipt. Notification shall include a plan for resolution of issues.
(d) (2)
A regional center shall submit copies of all independent audit reports that it receives to the department for review. The department shall compile data, by regional center, on vendor compliance with audit requirements and opinions resulting from audit reports and shall annually publish the data in the performance dashboard developed pursuant to Section 4572.
(e)
For purposes of this section, an independent review of financial statements shall be performed by an independent accounting firm and shall cover, at a minimum, all of the following:
(5)
An inquiry about whether the financial statements have been properly prepared in conformity with generally accepted accounting principles and whether any events subsequent to the date of the financial statements would have a material effect on the statements under review.
(6)
Working papers prepared in connection with a review of financial statements describing the items covered as well as any unusual items, including their disposition.
(f) For purposes of this section, an independent review report shall cover, at a minimum, all of the following:
(1)
Certification that the review was performed in accordance with standards established by the American Institute of Certified Public Accountants.
(2)
Certification that the statements are the representations of management.
(3)
Certification that the review consisted of inquiries and analytical procedures that are lesser in scope than those of an audit.
(4)
Certification that the accountant is not aware of any material modifications that need to be made to the statements for them to be in conformity with generally accepted accounting principles.
What is Attestation?
Simply put, attestation is a statement made by an accountant confirming certain information regarding a company’s financial statements. This information can relate to the accuracy of the statements, their completeness, or their compliance with applicable accounting standards.
Attestation auditors use accounting information in two main ways: first, to help them understand the overall financial condition of the organization, and second, to assess whether the organization's financial statements are accurate and properly presented. To perform this assessment effectively, attestation auditors must have a clear understanding of how accounting functions and its role in the financial reporting process.
Attestation Services
There are three primary types of attestation services: compilation, review, and audit. Each type offers a different level of assurance. Regardless of the type of attestation service you require, it is crucial to choose a reputable accounting firm with experience in your specific industry. With their assistance, you can ensure that your financial statements are accurate and comply with all applicable accounting standards.
Compilation
A compilation is the least expensive and quickest type of attestation service. During a compilation, a Certified Public Accountant (CPA) is not required to perform procedures to test or verify the accuracy or completeness of the client's financial information. The CPA merely compiles (or organizes) the client's financial information into financial statements that comply with Generally Accepted Accounting Principles (GAAP). Since no testing or verification is performed during a compilation, this service provides the lowest level of assurance to users of the financial statements.
Review
A review is more comprehensive than a compilation but less rigorous than an audit. During a review, the CPA performs procedures to test and verify the accuracy and completeness of the client's financial information. However, the CPA does not express an opinion on the conformity of the financial statements to GAAP. A review offers a reasonable level of assurance to users of the financial statements.
Audit
An audit is the most comprehensive type of attestation service. During an audit, the CPA tests and verifies the accuracy and completeness of the client's financial information and their compliance with GAAP. The auditor issues an opinion on whether the financial statements fairly represent, in all material respects, the financial position, results of operations, and cash flows of the client. An audit provides the highest level of assurance to users of the financial statements.
Attestation vs. Audit
You might wonder about the difference between attestation and audit. The short answer is that there is no difference; audits are a form of attestation.
Attestation involves evaluating and reviewing the truthfulness of data or information against a stated objective. An audit is a systematic examination of data to identify errors, risks, or compliance issues that may not have been previously detected.
Compilation vs. Audit
The key difference between a compilation and an audit lies in the level of assurance provided by the auditor. A compilation is limited to presenting, in financial statement form, information based on management's representations without undertaking any review or verification of those representations. On the other hand, an audit includes a review of these representations and a test of the associated accounting records and systems.
Types of Assertions
In addition to the three types of attestation services, there are also four types of assertions an auditor can make regarding financial statements:
Presentation and Disclosure:
Financial statements are fairly and accurately presented according to GAAP.
Occurrence:
Transactions have occurred and were recorded in the appropriate period.
Valuation and Allocation: Assets, liabilities, and equity interests are properly valued, and allocations are reasonable.
Rights and Obligations:
The rights to assets have been obtained, and the obligations related to liabilities are as stated in the financial statements.
The type of assertion an auditor makes depends on the type of attestation service performed. For example, if an auditor conducts a compilation, they may only assert on presentation and disclosure. If conducting an audit, they may make all four types of assertions.
Assertions
Assertions are the representations made by management in the financial statements. The three types of assertions are existence, rights and obligations, and valuation or allocation.
The accounting services management must have an appropriate basis for making these assertions, grounded in their understanding of the entity and its environment, including internal control. The auditor gathers evidence to address the risk that management’s assertions might be materially false.
Attestation Standards
Attestation standards are a set of professional standards governing the conduct of attestation engagements. These standards are issued by the American Institute of Certified Public Accountants (AICPA). The purpose of attestation standards is to provide guidance, set boundaries on an expanding line of services, establish a quality benchmark, and define the objectives to be met during attestation work.
Different attestation standards apply to compilations, reviews, and audits. The most common attestation standard is the "Statement on Standards for Attestation Engagements" (SSAE) 16, issued by the AICPA.
Attestation Standards
Attestation standards are a set of professional standards governing the conduct of attestation engagements. These standards are issued by the American Institute of Certified Public Accountants (AICPA). The purpose of attestation standards is to provide guidance, set boundaries on an expanding line of services, establish a quality benchmark, and define the objectives to be met during attestation work.
Different attestation standards apply to compilations, reviews, and audits. The most common attestation standard is the "Statement on Standards for Attestation Engagements" (SSAE) 16, issued by the AICPA.
SSAE 16
SSAE 16 is the most commonly used attestation standard. It provides guidelines on how to perform various attestation engagements, including financial statement audits, audits of internal control over financial reporting, agreed-upon procedures engagements, and reviews of prospective financial information.
Here are some of the key standards that must be adhered to in all attestation engagements:
Compliance:
The auditor must comply with relevant attestation standards to issue an attestation report.
Acceptance:
The auditor must accept the engagement to issue an attestation report.
Quality Control:
The auditor must have a quality control system in place to ensure the work is performed in accordance with relevant standards.
Preconditions:
Three preconditions must be met for the auditor to issue an attestation report:
1. The entity must have an appropriate basis for its financial statements.
2. Management must have made all required disclosures.
3. The auditor must have access to all necessary information.
Engagement:
The auditor must perform the engagement to issue an attestation report.
Reporting:
The auditor must issue a report on the results of the attestation engagement.
Validity of Attestation Reports
The validity of an attestation report is determined by the level of assurance the auditor was able to obtain. Generally, an attestation report should not be relied upon after one year, unless there have been follow-up audits to attest that everything is still in order. A compilation review report, which offers a lower level of assurance than an audit, typically has a shorter validity period than an audit report.
Attestation Reports
The auditor gathers evidence through various procedures, including inspection, observation, inquiry, and testing of documents and records. Once the evidence is collected, the auditor forms an opinion on whether the assertions are free from material misstatements. The auditor then prepares a report expressing their opinion.
There are Three Types of Attestation Reports: Unqualified, Qualified, and Adverse:
Unqualified:
An unqualified report is the best possible outcome for an audit. It indicates that the auditor found no material misstatements in the financial statements and has confidence in management’s assertions.
Qualified:
A qualified report indicates that the auditor found some material misstatements in the financial statements. However, this does not necessarily mean that management’s assertions are incorrect. The auditor may still have confidence in management’s assertions, even if some material misstatements exist.
Adverse:
An adverse report is the worst possible outcome for an audit. It indicates that the auditor found material misstatements in the financial statements and lacks confidence in management’s assertions.
Work with A Team of Experts
At Marshall Campbell & Co., our team of Attorneys, Certified Public Accountants (CPA's), Enrolled Agents (EA's), Real Estate Brokers, Property & Casualty Brokers, and Life, Accident & Health Agents, deliver a comprehensive suite of tax, audit, accounting, forensic and financial services tailored to meet the needs of today’s businesses. We’re committed to providing clarity and confidence, through accurate, timely financial reporting and compliance. Reach out to us today, to learn how we can support your business with trusted expertise and dedicated service.
Experience Exceptional
Attestation Services by Certified
Public Accountants & Board Certified Forensic Accountants & Examiners