Question 1

What is the difference between an audit, a review, and a compilation?

Accepted Answer

An audit provides the highest level of assurance, a review provides limited assurance, and a compilation provides none. In an audit, we test and verify the numbers and issue an opinion on whether the financial statements are fairly stated. In a review, we perform analytical procedures and inquiries to conclude that we are not aware of material modifications needed. A compilation simply presents management's financial statements in proper form. Which one you need usually depends on what a lender, board, or regulator requires.

Question 2

When does my 401(k) plan need an audit?

Accepted Answer

Generally, a 401(k) plan needs an audit once it reaches 100 or more eligible participants at the start of the plan year, based on the Department of Labor's participant-counting rules. First-year plan audits are performed under SAS 136, which changed how auditors report and how sponsors are involved. Because timing and participant counts can be nuanced, we recommend confirming your status well before the Form 5500 deadline so the audit does not become a last-minute scramble.

Question 3

Do I need a SOC 1 or a SOC 2 report?

Accepted Answer

Choose SOC 1 if your services affect your customers' financial reporting, and SOC 2 if the concern is security, availability, or related trust criteria. SOC 1 examines internal controls over financial reporting — relevant for payroll, claims, or transaction processors. SOC 2 examines controls around security, availability, processing integrity, confidentiality, and privacy — relevant for technology and data-handling providers. Many organizations ultimately need both because different customers ask for different reports.

Question 4

What is a single audit and when is one required?

Accepted Answer

A single audit is a combined audit of financial statements and federal award compliance required when an organization spends above the federal threshold in a year. It is performed under Uniform Guidance and tests both whether your statements are fairly stated and whether you followed the rules attached to your grants. The spending threshold that triggers a single audit has risen to $1 million, so some organizations that previously qualified may no longer need one.

Question 5

How far in advance should we start audit planning?

Accepted Answer

Start as early as possible — ideally weeks before year-end for a first-time audit and a month or more ahead for recurring engagements. Early planning lets us complete risk assessment under SAS 145, agree on scope and deadlines, and send document requests in advance. That preparation is what keeps fieldwork efficient and prevents surprises. The organizations with the smoothest audits are almost always the ones that engaged us before the reporting period closed.

Question 6

Why should we choose Pease Bell for our audit?

Accepted Answer

Because you get senior-level attention backed by the depth of a Top 200 U.S. CPA firm. Our audit team delivers opinions that lenders, boards, HUD, regulators, and investors trust, and we work directly with you rather than handing you off. From our Cleveland, Ohio base we serve clients across all 50 states, combining boutique responsiveness with the technical resources a national firm can bring. Our tagline says it plainly: Full Service. Boutique Touch.

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Services: Audit & Assurance