Financial Statement Audit
Independent financial statement audits that meet lender, investor, bonding, and board requirements, performed by a Top 200 CPA firm.
Overview
A financial statement audit gives lenders, investors, sureties, boards, and regulators an independent opinion on whether your financial statements are presented fairly, in all material respects, under the applicable financial reporting framework. Pease Bell performs audits of private companies, not-for-profit organizations, and other nonpublic entities under generally accepted auditing standards issued by the AICPA. The audit is designed to provide reasonable assurance, the highest level of assurance a CPA firm offers on historical financial statements.
Companies often need an audit for the first time because of a new loan covenant, an outside investor, a bonding requirement, or an upcoming sale. Pease Bell helps first-year audit clients prepare, including establishing opening balances. Organizations that spend federal awards above the threshold may also need a single audit under the Uniform Guidance, which we can perform as part of the engagement.
Our Financial Statement Audit Services
Annual GAAS Audits
We plan and perform audits under AICPA generally accepted auditing standards, testing balances and transactions and issuing an opinion on whether the financial statements are fairly presented.
First-Year Audits
We help companies facing their first audit understand what will be requested, address opening balances and accounting policies, and set realistic expectations for the process.
Lender and Covenant Audits
We perform audits that satisfy loan agreement requirements and can report on compliance with certain covenant terms when a lender asks for that additional report.
Bonding and Surety Audits
We audit contractors and other companies whose surety underwriters require audited financial statements, with attention to areas such as contract revenue and work in progress.
Single Audits
We perform single audits under the Uniform Guidance for organizations that expend federal awards above the threshold, including compliance testing of major programs and reporting to the federal clearinghouse.
Communications to Management
We communicate control deficiencies and other matters identified during the audit to management and those charged with governance, with practical observations you can act on.
Challenges We Help You Address
- ✓A new lender or investor requiring audited financial statements
- ✓Preparing for a first audit with no prior audited balances
- ✓Surety underwriters asking for audited statements to increase bonding capacity
- ✓Federal funding that triggers a single audit requirement
- ✓Audits that run long because year-end records are not ready
Frequently Asked Questions
What is a financial statement audit?
A financial statement audit is an independent examination of an entity’s financial statements by a CPA firm. The auditor tests account balances, transactions, and disclosures, obtains an understanding of internal control, and issues an opinion on whether the statements are presented fairly, in all material respects, under the applicable framework, such as U.S. GAAP. An audit provides reasonable assurance, which is higher than a review or compilation.
Who requires an audited financial statement?
Audits are commonly required by lenders under loan agreements, by outside investors or private equity owners, by surety companies for bonding, by boards and members of not-for-profit organizations, and by some regulators and government funding sources. Organizations that spend federal awards above the Uniform Guidance threshold must also obtain a single audit. A potential buyer may ask for audited statements before an acquisition.
What should I expect in a first-year audit?
A first-year audit usually takes more time than later years because the auditor must gain an understanding of the business, its systems, and its accounting policies, and must obtain evidence about opening balances. Expect requests for prior-year records, significant contracts, and support for estimates. Cleaning up reconciliations and documenting key processes before fieldwork can make the first audit more efficient.
What is a single audit?
A single audit is an audit of an entity’s financial statements and its compliance with federal program requirements, performed under the Uniform Guidance. It applies to nonfederal entities, such as not-for-profit organizations and local governments, that expend federal awards above a threshold in a fiscal year. It includes testing of major federal programs and is performed under both GAAS and Government Auditing Standards.
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