Stockholders, creditors, board members, and private investors often need assurance that the financial statements accurately represent the true financial position of a business or organization. At Cole, Newton & Duran, our professionals help businesses and organizations by providing three levels of assurance to meet their respective needs.
The audits our professionals perform include examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. Our work includes a review of internal controls, testing of selected transactions, and communication with third parties. We also assess accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement. We then document our opinion as to whether the statements are fairly presented in conformity with Generally Accepted Accounting Principles.
Our professionals also perform physical inspections by observing inventory counting methods and performing test counts. We document and test each operating cycle, including sales and cash receipts, expenses and cash disbursements, and payroll. Our audit papers include a detailed work program to document the examinations and testing performed, as well as your supporting work papers.
A review engagement consists primarily of analytical procedures we apply to the financial statements, and various inquiries we make of a company's or organizataion's management team. If the financial statements or supporting information appear inconsistent or otherwise questionable, we may need to perform additional procedures.
A review does not require Cole, Newton & Duran to study and evaluate a company's or organization's internal controls, verify data with third parties, or physically inspect assets. Rather, a review report expresses limited assurance in the form of the statement: "We are not aware of any material modifications" for the financial statements to be in conformity with the Generally Accepted Accounting Principles. Reviewed financial statements must include all required footnotes and other disclosures.
In compiling financial statements for a client, our professionals present information that is the "representation of management" and expresses no opinion or assurance on the statements. Compilations do not require inquiries of management or analytical procedures. Instead, we rely on our knowledge of accounting principles and a general understanding of your business or organization.