| A review is generally performed when an organization wants moderate comfort over the financial data and does not require feedback regarding internal controls. The procedures applied during a review are much less in scope than that of an audit. Instead, the CPA designs and performs analytical procedures, inquiries and other procedures, as appropriate, based on the CPA’s understanding of the industry, knowledge of the organization and awareness of inherent risk. Unlike an audit, the CPA does not obtain and understand the organization’s internal controls nor assess fraud risk. At the end of the review procedures, the CPA provides a report stating that they are not aware of any material modifications that should be made to the financial statements, a more limited statement than the assurance given in an audit. Many major funders prefer that an organization undergo a formal audit each year. An audit provides the highest level of assurance that the financial information is accurately recorded and presented, as well as providing feedback on internal controls. However, if the organization is small, many funders understand that the cost of a formal audit each year may be unnecessarily costly and will accept a review in place of, or on an rotating basis with an audit. Our goal with a review is to review a client’s financial data for obvious errors and produce financial statements in conformance with generally accepted accounting principles. “Jones and Associates are a pleasure to work with – they are diligent, professional, and structure their financial reviews in a way that makes this complicated task easier for those of us that aren’t CPA’s.” Matt Fox, ROOTS Young Adult Shelter |
