About Gary Krupa, CPA in Santa Rosa CA
CONTACT  (805)320-8503 cell phone

Can a compilation make more sense than an audit or review? (cont.)


   Consequently, before deciding to engage an auditor to perform an audit or review, you should determine whether you really need one, or whether a compilation will do just as well. Here are some factors to consider:

   A compilation engagement can be combined with other professional services to strengthen your accounting system, making an audit or review less necessary to improve your system's reliability and "keep your fiscal house in order":

These services can impair the CPA's independence when performing the compilation, unless the CPA doesn't assume management responsibility or doesn't make management decisions for your organization.

   A qualified CPA can also help you prepare for an audit by reconciling accounts timely e.g. bank reconciliations, preparing schedules and work papers that the auditor would prepare, e.g. investment and loan schedules. Doing this would reduce the amount of work your auditor needs to do, and therefore, reduce the cost of the audit. This is a service we can provide, having helped companies prepare for audits for many years. We also assisted auditors with their audit work.

   As indicated above, a compilation engagement is separate from a preparation of financial statements engagement which would be performed under SSARS* 21, AR-C section 70. This wasn't the case prior to SSARS 21; financial statements then were routinely prepared by a CPA as part of the compilation.

See below for our rates for financial statement preparation services.

Fees for our compilation and financial statement services: **
Basic compilation, without financial statement preparation $1,500 - $2,000
Financial Statement preparation without applicable disclosures
 as required by the applicable reporting framework, e.g. US GAAP $500 - $1,000
Financial Statement preparation with applicable disclosures $750 - $1,500
Financial Statement preparation without required applicable
 disclosures and without a Statement of Cash Flows $300 - $600
Financial Statement preparation with applicable disclosures and
 without a Statement of Cash Flows $550 - $1,100
Financial Statement preparation prepared in accordance with the
 tax basis of accounting $500 - $1,300
Reporting on supplementary information $100 - $300
Financial statement presentation, with or without discussion of
 financial data i.e. we'd give the presentation, or we'd prepare the
 slide show or other media display for you to give it.
$350 - $1,000
Compilation with additional services such as financial statement Fee depends on
 preparation, accounting and or bookkeeping, internal control study the extent of
Other finc'l. stmt. services such as budgeting, audit assistance services needed



Sources used to write this article:

Websites:

Guide to Financial Statement Services: Compilation, Review and Audit AICPA.

Seven Ways to Reduce your Audit Costs by Dennis Walsh, CPA. Blue Avocado, A Magazine of American Nonprofits.

Is it Time for an Audit? by Jeanne Bell. Blue Avocado, A Magazine of American Nonprofits.

What is a Review or Compilation? National Council of Nonprofits.

Book:

SSARS no. 21 - The New Compilation and Review Standards. Professional Publication Services, LP 2015.

* Statements on Standards for Accounting and Review Services, #7285 CPE Course material. SSARS 21 is effective for engagements performed in accordance with SSARSs for periods ending on or after December 15, 2015.

** The higher fee in the range generally applies if you're engaging us to render these services for the first time, or based on the complexity of the service.