Wagner & Company CPA, LLC, performs services at most all levels of comfort on financial statements. Since this statement may not be clear to anyone other than accountants, let us explain further. There are three levels of opinion a CPA is able to give on your financial statements:
The highest level of comfort is an audit. In an audit, we review, study, and evaluate your system of internal accounting control, as well as verify from external sources on a sample basis, amounts reflected in the financial statements. While an audit is not of sufficient scope to discover fraud, it is the level of comfort required by numerous governmental agencies and lending institutions.
The middle level of comfort is a review. In a review of financial statements, we perform various procedures prescribed by the American Institute of Certified Public Accountants, as follows:
Performing inquiry and analytical procedures that provide the accountant with a
reasonable basis for expressing limited assurance that there are no material
modifications that should be made to the statements in order for them to be in conformity with generally accepted accounting principles or, if applicable, with another
comprehensive basis of accounting.
A review does not contemplate a study and evaluation of internal accounting controls, tests of accounting records, tests of responses to inquiry, or certain other procedures ordinarily performed during an audit. A review does require the following:
• Knowledge of the accounting principles and practices of the industry.
• Understanding of the client's business and industry to provide a basis for expressing
the limited assurance opinion.
• Inquiries concerning accounting principles and practices, procedures for recording,
classifying and summarizing transactions, inquiries concerning actions taken at
meetings of stockholders, board of directors and other comparable meetings that may
affect the financial statements, and inquiries of persons responsible for financial and
• Analytical procedures to assist us in identifying relationships and individual items that
The lowest level of comfort that we can give is a compilation. A compilation consists of taking numbers provided by management and recasting such numbers, with minimal inquiry, in an acceptable financial statement format. No opinion is provided as to the accuracy of the amounts or disclosures contained within the financial statements.
Our firm's standards for financial statement engagements require an engagement letter for every financial statement we prepare.
Business enterprises seldom operate in an unchanging environment. Consequently, it is management's responsibility to establish effective internal controls and to identify the need for changes in accounting systems, company policies, and business practices. In order to assist management, it is our policy to, orally or in written form, make recommendations to management.
We address our recommendations to the board of trustees, its president, or an appropriate officer depending upon the situation. Before we present any recommendation, we will discuss it at appropriate levels within an organization.
To view our most current peer review click here.