Will a compilation substitute for an audit? If so, it can save you a substantial amount of money. The information below can help you decide.

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:

    • Your need for financing; do you need a substantial amount or can you make do with a smaller amount?
    • Are your books in good order, or does your accounting system deliver reliable financial information?
    • Your relationship with the funding source. They may be willing to grant you more leeway in meeting financial reporting requirements depending upon your credit history with them or commitment to achieving your organization’s mission. The IRS is an example of the latter case, as I learned when I applied for tax-exempt status for a non-profit organization. A well-documented mission statement on IRS form 1023, followed by examples of activities consistent with my client’s mission went a long way towards obtaining the tax exemption.

 

Author: Gary Krupa

I'm a CPA, married, with two cats, I play the accordion and speak French. I live in Sedona, Arizona in the Village of Oak Creek. I grew up in New York, and also lived in Southern California, the North Bay region of the San Francisco Bay area, and elsewhere in Northern Arizona. While in college, I introduced to the Accounting Society a corporate version of Monopoly called "Corporate Monopoly". Visit my custom website at http://garykrupacpa.com for very informative, interesting and up-to-date information about how to improve the state of your finances! It's where political correctness is kept to a minimum and financial helpfulness to a maximum.

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