July 18, 2012. San Francisco, CA. Safe Harbor LLP (web: safeharborcpa.com), a leading San Francisco CPA Firm, is proud to announce its affiliation with the North San Francisco Bay CPA firm G&J Seiberlich & Co LLP (web: gjscollp.com). The relationship focuses on enhances audit and attestation services for San Francisco Bay Area businesses. The company’s affiliation will allow an expansion in the areas of service that provided to clients, with the same level of expertise and care the firm is already known for. G&J Seiberlich & Co LLP brings additional depth in the audit and attestation areas, as well as estate, gift and trust planning and compliance. The Firm also has extensive expertise in winery and vineyard tax and accounting matters.
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Many business owners are not aware that there are different levels of assurance that can be provided by accountants. Many business owners tend to refer to any assurance work that is performed by an accountant as an audit as they frequently say, “The auditors are here.” In addition to an audit, an accountant can provide a review or a compilation. By understanding the different levels of service and what they entail, it will allow a business to select the service that is best for the business and what is required by the users of financial statements.
An audit is the highest level of assurance Safe Harbor LLP and G & J Seiberlich & Co LLP can provide. Through the use of various and vast techniques, Safe Harbor LLP / G & J Seiberlich & Co LLP accountants verify the accuracy of the financial information and from there, an opinion can be expressed on the information as it relates to the fairness of the financial statements and provide reasonable assurance that the financial information provided by the business has been tested appropriately. An important item to note is that audits only provide reasonable assurance, not unconditional assurance about whether the financial statements are free from material misstatement. Audits are the most expensive services that can be provided by Safe Harbor LLP / G & J Seiberlich & Co LLP accountants as thorough testing is completed in order to understand a business’ internal control, assess fraud risk, and attain substantiation to support the financial information through inspection and confirmation.
A review by Safe Harbor LLP\G & J Seiberlich & Co LLP accountants is the next level, which provides a limited level of assurance that there are no material modifications that should be made to the financial statements. Since a review only provides limited assurance, testing primarily consists of inquiry and analytical review of the financial data. For an audit, Safe Harbor LLP / G & J Seiberlich & Co LLP accountants would want to see the backup that supports all of the financial data; however, a review does not require the same level of detail. Some main reports may need to be provided, if upon inquiry, management’s response does not make sense. Reviews require accountants to perform ratio analysis, comparison of the business’s operating performance to prior accounting periods, industry average comparison, as well as other financial analyses that they may deem appropriate, with the goal of providing limited level of assurance. Reviews are less expensive than audits as they require less testing and less understanding of how the business operates.
A compilation is the lowest level of service Safe Harbor LLP / G & J Seiberlich & Co LLP accountants can provide. For a compilation, Safe Harbor LLP / G & J Seiberlich & Co LLP accountants essentially assist the business in the preparation of the business’s financial statements to insure that they are in an acceptable format. Compiled financial statements can omit footnotes and any informational statements generally required to present the financial condition or results of operations of an entity. No assurance over the financial data is being provided by the accountant as no testing, inquiry, or analytical procedures are performed. Safe Harbor LLP / G & J Seiberlich & Co LLP accountants may obtain some basic supporting documents for some important account balances but it is not necessary. An important difference between a compilation and a review and audit is that when performing a compilation, the accountant does not need to be independent but for a review and audit, the accountant is required to be independent. Compilations are much less expensive than an audit or review since no testing is performed.
Determining which level of service is right for a business is really a question of the level of assurance that is required on the financial statements. The best way to go about finding out what is required is to talk with the business’s bank (or other third-party users of the financial statements) about which level of service they require. It would also helpful to discuss the options with Safe Harbor LLP\G & J Seiberlich & Co LLP Partners who can help guide the business based on the business’s business’ needs. This type of decision is not to be taken lightly as it could save the business time and money.
About Safe Harbor CPAs – a Professional CPA Firm in San Francisco
Safe Harbor CPAs specializes in accounting and tax services for individuals and businesses throughout the San Francisco Bay Area and greater California. Safe Harbor CPAs helps both individuals and businesses with tax preparation, IRS audit defense, and audited financial statements. The firm prides itself on friendly yet professional service and utilizes state-of-the-art Internet technology to provide quality customer service.
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