Compilation, Reviews, Agreed Upon Procedures (AUP) & Audits
Always wondered what are compilation, reviews, agreed upon procedures, and audits? Well, almost every organization — whether it’s a privately held business, a publicly owned corporation, or a nonprofit organization — must prepare reports on its financial performance which is done through compilations, reviews, agreed upon procedures, and audits.
Such reports help owners and managers make operating decisions, enable creditors to evaluate loan applications, and provide individuals with information to make investment decisions. The accounting profession recognizes that different entities have different accounting needs. Acknowledging these differences, the profession has developed standards that enable CPAs, like JS Morlu, to offer a range of financial statement services.
What Compilation, Reviews, Agreed Upon Procedures (AUP) & Audits Services Does JS Morlu Offer?
JS Morlu offers a wide variety of financial and tax services based on the level of assurance you need. Larger companies and those with a high level of funding through outside investments will generally require a higher assurance level. On the other hand, businesses operating on a smaller scale don’t need as in-depth of financial and tax services. Due to the different levels of intricacy, we are proud to offer the following services to fit your needs:
Preparation of Financial Statements
- Why Performed: We prepare financial statements pursuant to a specified financial reporting framework. All businesses should have internal financial statements to accurately track growth and make informed business decisions.
- Standards Met: Statements on Standards for Accounting and Review Services (SSARS) No. 21, Section 70, Preparation of Financial Statements.
- Work Process: We are required to include a legend on each page of the financial statements stating that no assurance is being provided. The financial statements will be compliant with your reporting standard.
- Why Performed: A compilation is when a financial statement is prepared by an independent accountant. A compilation allows companies without an accountant to have financial statements prepared at a lower cost. There are instances where compilations may be required by a third party. For instance, the Small Business Administration may require companies participating in the 8(a) program to submit financial statements compiled by a licensed independent public accountant.
- Standards Met: A compilation must comply with Statements on Standards for Accounting and Review Services (SSARS) and requires the accountant to have an understanding of the client’s industry, obtain knowledge about the client, read the financial statements and consider whether such financial statements appear appropriate in form and free from obvious material errors.
- Work Process: In a compilation, we assist management in presenting financial information in the form of financial statements without providing any assurance that there are no material modifications that should be made to the financial statements. It does not contemplate any of the procedures ordinarily performed in an audit or a review. A compilation is limited to presenting in the form of financial statements information that is the representation of management. There is no expression of an opinion or any other form of assurance on the financial statements. You have the option to issue notes along with the compiled financial statements.
- Why Performed: A review is typically performed because outside third parties or investors are looking for some comfort that the financial statements are not materially misstated, but do not require audited statements. For instance, the Small Business Administration requires companies participating in its 8(a) program to provide reviewed annual financial statements from a licensed independent public accountant for those concerns with gross annual receipts of $2,000,000 to $10,000,000.
- Standards Met: A review is conducted in accordance with Statements on Standards for Accounting and Review Services (SSARS) issued by the AICPA and consists primarily of inquiries of company personnel and analytical procedures applied to financial data.
- Work Process: A review is significantly less in scope than an audit in accordance with GAAS and only provides limited assurance that there are no material modifications that should be made to the financial statements. There is no expression of an opinion on the financial statements taken as a whole. All applicable notes are required to be included with the financial statements.
Financial Statement Audits
- Why Performed: Most often, an audit is performed because third parties (such as banks, creditors, outside investors or government) require an auditor’s opinion on financial statements. Audits are performed for many of the reasons a review is performed. For instance, SBA requires its 8(a) participants to provide audited financial statements when their revenues exceeds more than $10 million. However, an audit is more in-depth and consists of issuing an opinion on internal controls and the financial statements. JS Morlu is a certified public accountant, allowing us to be your trusted independent party.
- Standards Met: An audit is conducted in accordance with Generally Accepted Auditing Standards (GAAS) and includes tests of accounting records and other procedures considered necessary to express such an opinion.
- Work Process: An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. This evidence is obtained through inquiry, physical inspection, observation, third party confirmation, examination, analytical procedures and other steps. An audit also includes assessing the accounting principles used and significant estimates made by management and evaluating the overall financial statement presentation.
Our audit includes obtaining an understanding of the entity and its environment, including internal controls. Our efforts during the audit process and related services often help us to identify and address issues related to:
- Internal Controls
- Business processes and inefficiencies
- Areas for cash flow improvement
- Company and industry trends
What Other Areas In Terms Of Compilation, Reviews, Agreed Upon Procedures (AUP) & Audits Can JS Morlu Help Me With?
We offer various other services to fit your business needs. If you don’t see a service you are looking for listed, reach out to one of our team members to put together a personalized package. Additional audit and attestation services we offer include:
- Performance/Operational Audits
- Compliance Audits
- Internal Control Audits
- A-133 Audits
- 501 (c) 3 Audits
- Audits of International Field Office Services
- Grants and Contracts Audits
- Information System Audits
- Integrated Audits
- Follow-Up Audits
- Recovery Audits
- IT Audits
- Forensic Audit
- Employee Benefit Plans
- SSAE 16 (SOC I & II)
- Agreed-Upon Procedures
Transportation Accounting & Audits
Federal contracts can prove lucrative for engineering and surveying firms, as well as construction contractors. Qualifying for these contracts requires a calculation of your overhead costs in accordance with Federal Acquisition Regulation (FAR) requirements. We are well-versed in Federal Acquisition Regulations (FAR) 30, 31 and 42, governmental auditing standards (Yellow Book), and American Association of State Highway and Transportation Officials (AASHTO) Guide. Our audits can result in our clients receiving DOT-approved overhead rates and cognizant letters.
FAR Audits are conducted on engineering consultants’ Statements of Direct Labor, Fringe Benefits, and General Overhead. These audits are to ensure compliance with Generally Accepted Accounting Principles (GAAP), 48 CFR Part 31 of the Federal Acquisition Regulation (FAR), and, to the extent applicable, the Cost Accounting Standards (CAS) of 48 CFR sub-part 9900. JS Morlu can help to review your overhead rate calculations in advance and ensure that the rates are in compliance with FAR. Our services include:
- Review of historical FAR overhead rates and disallowed expenses
- Modifications to maximize current and future FAR overhead rates
- Calculation of facilities cost of capital
- Preparation for a FAR audit
- Negotiate disputed issues
Consultant firms performing, or desiring to perform, services for a state DOT must submit a CONR 385 package at the time of designation and annually thereafter. The annual submission is due six months after the end of each firm’s fiscal year. We can also assist you with various state reports including CONR-385.
JS Morlu personnel have more than 15 years of proven experience with Davis-Bacon compliance and monitoring. We assist with certified payroll reviews, site monitoring, employee interviews, calculation of restitution, and with disseminating instructional information regarding Davis-Bacon compliance to Primes and Subs.
What are the Benefits of Working with JS Morlu For Compilation, Reviews, Agreed Upon Procedures (AUP) & Audits?
The team at JS Morlu has more than a decade of experience complying with GAAP principles and SSAE policies. In addition, we are constantly taking continuing education courses to catch the latest updates to ensure your audit and attestation services are performed to the highest level of standard. When you place your trust in JS Morlu, you will see timely and accurate audit and attestation services, all of which comply with generally accepted accounting principles or whatever standard you are required to follow. Moreover, we have the flexibility to adapt and mold the scope of our services as your business begins to grow.
Deciding on the level of assurance your business needs can be tricky, which is why JS Morlu is here to help. We will set up an introductory call to work through the right audit and attestation service for your business. Don’t wait until your lenders are demanding financials from an independent party. Contact JS Morlu ahead of time to not only stay in compliance with lenders, but to also see business growth through accurate financial reporting.