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Accounting & Audit

Accounting and Assurance Services

By September 24, 2015No Comments

Lindsay & Brownell has an accounting and assurance department, often referred to as an A&A Department, which can provide a variety of services for its clients. Each service has the ability to strengthen an entity’s accounting in the areas of operating effectiveness, efficiency, and/or financial statement reliability and accuracy. A&A services differ in the type of work that is performed, however, both branches help propel an entity to a more stable financial reporting level.

The first part of A&A stands for Accounting Services. Accounting Services offered by Lindsay & Brownell include bookkeeping, consulting, internal control review and agreed upon procedures. Each area is explained in more detail below:

Bookkeeping: Bookkeeping is the process of recording financial transactions in a central accounting system to be accumulated into financial statements for a business. Bookkeeping includes recording a host of transactions such as purchases, sales, receipts and payments. Additional duties considered under bookkeeping include document management, payroll, invoicing, A/R management, bill payments, and vendor management. It is vital that transactions are recorded correctly and timely in order to provide a complete and accurate picture of the financial position of the business.

Accounting Consulting: Accounting consulting services play a crucial role in helping an entity enhance its accounting and reporting process, improve operating performance, and interpret financial results. Accounting consultants provide services such as the review of significant accounting processes, analyzing weaknesses in the processes which would subject the business to errors or fraud, and provide suggestions for improvements to these processes. Accounting consultants also assist with budgeting, projections, cash management, financial statement close, and will offer specialized financial advice related to the client’s specific business or industry.

Internal Control Review: An assessment of internal controls (not an audit) is a consulting engagement to analyze the client’s internal control structure through an extensive process of client interviews, walkthroughs of significant accounting processes, and identification of controls in place. After gaining an understanding of the processes used and internal controls in place, recommendations are made to improve operating efficiencies and suggestions are given for the implementation of additional preventative or detective controls to mitigate fraud risk factors.

 The second part of A&A stands for Assurance. Assurance Services are comprised of  three  general engagement services that Lindsay & Brownell provides: compilations, reviews, and    audits. These services provide an entity with the means to comply with   statutory requirements  and layout critical information for making well-informed business decisions. The three  assurance services that Lindsay & Brownell provides are detailed   below:

Compilation: A compilation of financial statements is the lowest level of service CPAs provide with respect to financial statements. In a compilation engagement, the accountant assists management in presenting financial information in the form of financial statements. Although the CPA must comply with standards set forth by the American Institute of Certified Accountants (AICPA) which require the accountant to have an understanding of the client’s business and industry and must read the financial statements to consider whether they appear appropriate in form and free from obvious error, a compilation does not require the accountant to perform analytical procedures, an assessment of internal controls or test individual transactions. No opinion is issued in a compilation related to the accuracy or reliability of the financial statements.

Review: A review engagement is the next level of service a CPA can provide with respect to financial statements. In a review, the CPA performs inquiries, analytical procedures and other procedures as deemed necessary, based on the CPA’s understanding of the client’s industry, business it operates, and associated risks identified. In a Review engagement the CPA reports that they are not aware of material modifications that should be made to the financial statements. A Review engagement does not consider obtaining an understanding of the entity’s internal controls, assessing fraud risk, testing accounting records, or other procedures ordinarily performed in an audit.

Audit: Audited financial statements provide the users of the financial statements with the auditor’s opinion that the financial statements are presented fairly, in all material respects, in conformity with the applicable financial reporting standards. In an Audit, the auditor is required to gain an understanding of the entity’s internal controls, assess fraud risk, and corroborate the amounts and disclosures included in the financial statements by obtaining audit evidence through inspection, examination, confirmation, and various other procedures.  When reporting on an Audit, the auditor can issue one of four opinions, either: unmodified (the financial statements are free from material error), modified (the financial statements represent the entity fairly but are not in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”)), adverse (the financial statements do not conform to U.S. GAAP and there is a material misstatement), or a disclaimer of opinion (which occurs when an auditor is unable to obtain sufficient appropriate audit evidence on which to base an opinion and the possible effects could be both material and pervasive).

Conclusion: Businesses of all types can utilize these A&A services to improve their accounting and business operations. Lindsay & Brownell has been providing A&A services to its clients for over 20 years. Please contact us so that we may assist you in improving your business.

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