An audit, review, and compilation are three of the most common types of financial statement services provided by CPAs. Each service differs significantly in terms of the level of assurance provided and the procedures performed to achieve that level of assurance, if any. Understanding these differences is important for business owners, lenders, and other financial … Read more
If you’re leading a nonprofit, you already know how critical financial transparency is to sustaining trust. Donors, grant makers, board members, and even the public want reassurance that funds are being managed responsibly. One of the best ways to demonstrate transparency is through assurance services, which help to: Provide credibility to financial statements Satisfy grant … Read more
by H2R CPA Team A company’s management team is often interested in painting the rosiest possible picture of a company’s financial performance. But aggressive earnings management, or “spin,” can mislead investors and lenders. Here are some ways U.S. Generally Accepted Accounting Principles (GAAP) can be manipulated to obscure the truth.Creative accounting vs. cooking the booksEarnings … Read more
by Joseph M. Delisi, CPA With audit season upon us, it is important to remember that auditors are required to address “risk of fraud” during the audit process for both businesses and nonprofit organizations. The most common type of fraud is asset misappropriation, occurring in 85% of cases, according to a Global Fraud Study by … Read more
by H2R CPA TeamWhen accountants conduct an audit or review, they can’t test every transaction. Instead, they set a “materiality” threshold. This benchmark is used to obtain reasonable assurance in an audit — or limited assurance in a review — of detecting misstatements that could be large enough, individually or in the aggregate, to be … Read more