Audits
Agreed Upon Procedures Governmental entities may be required by law, contracts, or grant agreements to provide for an agreed-upon procedures (AUP) engagement. An AUP is an engagement in which an auditor is engaged to: (1) carry out procedures of an audit nature to which the auditor and the entity and any appropriate third parties have agreed and (2) report on factual findings. An AUP engagement may entail the auditor performing certain procedures concerning financial information (e.g., accounts payable, accounts receivable, purchases from related parties) or non-financial information. Our firm assists governmental entities by designing engagements to meet your accountability needs.
Reviews
Less extensive than an audit, a review engagement consists primarily of analytical procedures and various inquiries we make of your management team. If the financial statements or supporting information appear inconsistent or otherwise questionable, we may need to perform additional procedures.
Why might a governmental entity request a review engagement? It can be a good middle ground, providing the advantages of a CPA's technical expertise without the work and expense of an audit. Compilations
Compilations of financial statements present information that is the "representation of management" and provides an opinion or assurance on the statements. Compilations don't require inquiries of management or analytical procedures. Instead, we rely on our knowledge of accounting principles and a general understanding of your entity. Banks often require compilations from an independent CPA as part of their lending covenants. Which Type of Engagement Do You Need? The type of engagement needed is dependent on the specific circumstances, including requirements imposed by clients or oversight entities.
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