Assurance Services
As the name Assurance Services implies, Nail McKinney Professional Association performs various procedures in order to provide a level of assurance to a decision maker about information. Assurance Services is a broad concept encompassing various assurance levels (audit, review, compilation, examination, and agreed-upon procedures) and various information (financial statements, forecasts and projections, and management assertions).
Assurance that the financial statements accurately represent the true financial position of the company is often needed by the credit grantors, stockholders, federal and state agencies, private investors and other interested users. When provided by out Tupelo, MS CPA firm, assurance Services also provide guidance for decision makers within the organization in terms of strategic planning and the attainment of company goals.
Review the Assurance Services below to determine which report is right for you.
Financial Statements: Audit, Review, Compilation
Audit
An Audit is generally performed in order to provide assurance to decision makers including stockholders, creditors and banks, grantors, regulators, private investors and other interested users. The objective of an audit of financial statements is the expression of an opinion on the fairness with which they present, in all material respects, financial position, results of operations, and cash flows in conformity with generally accepted accounting principles (GAAP).
While performing a financial statement audit, procedures are performed to:
Gain an understanding of your organization and its environment, including its internal control
Assess the risk of material misstatement of the financial statements whether due to error or fraud
Design the nature, timing, and extent of further audit procedures that are responsive to the assessed risks
Test your accounting records and your responses to our inquiries by obtaining sufficient appropriate and corroborating evidence through inspection, observation, confirmation, and analytical procedures
Provide a written report expressing our opinion
Although audit services are generally provided to meet a third party requirement, we understand this service has greater value for you when we identify opportunities for your organization. With our industry knowledge, we look for ways for your organization to improve its operations, increase efficiency and effectiveness, and increase the bottom line.
Review
The objective of a Review of financial statements is to express limited assurance that there are no material modifications that should be made to the financial statements in order for the statements to be in conformity with GAAP.
In order to obtain a reasonable basis for the expression of limited assurance, we:
Perform inquiry and analytical procedures
Obtain representations from management
Although review procedures are much less in-depth than audit procedures, we use our knowledge of your industry to identify and share our recommendations to improve the results of your operations.
Compilation
The objective of a Compilation of financial statements is to present in the form of financial statements, information that is the representation of management (owners) but does not express an opinion or any other form of assurance on them.
Even though compilations provide no assurance to third-party decision makers, just the formatting of financial information in a standard and frequently comparative format, allows us to highlight and recommend ways for your organization to enhance your operations.
Forecasts and Projections:
We help clients plan operations, obtain financing for expansion, minimize future years' taxes, and lend assistance in other areas related to planning and accounting for future events. To effectively render such services, we often help clients develop future-oriented, or prospective, financial information.
Investors realize historical financial statements do not fulfill all of their information needs. They want information about what is likely to happen in the future, in addition to, information about what has happened in the past. Investors realize no one can predict the future with certainty, but they believe that access to prospective financial information helps them make better decisions. Thus, the objective of developing prospective financial information is not to predict the future, but to provide information to improve the decision-making process.
There are two broad categories of prospective financial statement engagements—internal use and third-party use. Within those broad categories, we provide various levels of service. The types of services are as follows:
Examination
Examination engagements generally involve: (a) evaluating the preparation, the support underlying the assumptions, and the presentation of the prospective financial statements for conformity with AICPA presentation guidelines and (b) issuing an examination report. The examination report expresses a positive opinion on whether the assumptions provide a reasonable basis for the prospective financial statements and whether the prospective statements conform with AICPA presentation guidelines.
Compilation
Compilation engagements are the lowest level of service we provide on prospective financial statements intended for third-party use. A compilation engagement involves: (a) assembling the prospective financial statements to the extent necessary, (b) reading the prospective financial statements for conformity with AICPA presentation guidelines and for consideration of whether they appear to be obviously not inappropriate, and (c) issuing a compilation report. A compilation report disclaims an opinion or any assurance on the prospective financial statements and their assumptions.
Assembly
In an assembly engagement, we do not provide any type of assurance. We merely perform mathematical calculations to convert your assumptions into prospective amounts. We may or may not issue a report.
In Attestation Engagements:
We provide a written communication expressing a conclusion about the reliability of an assertion that is the responsibility of another party. The levels of service in attestation engagements are limited to examination, review, and application of agreed-upon procedures.
Examination
In an examination engagement, we apply tests sufficient to reduce the risk of an undetected material misstatement to an appropriately low level. Accordingly, the level of testing is similar to an audit of financial statements.
Review
A review engagement provides a moderate level of assurance on the subject matter. We perform procedures sufficient for us to report that we are not aware of any material modifications that need to be made for either (a) the assertion about the subject matter to be fairly stated, in all material respects, based on the criteria or (b) the subject matter to be in conformity with the criteria, in all material respects. In this regard, a review is similar to a review of financial statements.
Agreed-upon procedures
Agreed-upon procedure engagements are a unique attestation engagement because we report procedures and findings rather than a conclusion. These engagements involve applying procedures, agreed-upon by specified users, to information and issuing a report that enumerates the procedures performed, states our findings, and restricts the use of the report to the parties that agreed to the procedures.
If you would like to learn more about our assurance services call us at (662) 842-6475 or contact us to schedule a consultation.
Our Offices
Our expertise is widespread and we have multiple office locations to make it convenient for you to get help. You can find us at:
Tupelo Location
PO Box 196
Tupelo, MS 38804
Amory Location
PO Box 64
Amory, MS 38821