Get CPA certified financials if possible

AUDITED FINANCIAL STATEMENTS

Banks, stockholders, creditors and private investors often need assurance that your financial statements accurately represent your true financial position. It’s just good business. Audited financial statements provide the highest level of assurance. If your company is publicly held, the Securities and Exchange Commission requires you to file annual reports that have to be audited.

As an independent auditor, Buddha Tax and Accounting CPA provides the information you need to improve your business.

Best rated NYC CPA firm Buddha Tax and Accounting CPA serves as an independent auditor to examine your compiled financial statements — and the disclosures that go with it — to prepare a financial statement audit for your company. An audit involves a methodical review and objective examination of your finances, including a review of your internal controls, tests of selected transactions and inquiries to other parties.

THE PURPOSE OF FINANCIAL STATEMENT AUDITS

As an experienced auditor, Buddha Tax and Accounting CPA has to attest to the validity of your audited financial statements and other disclosures. The resulting financial statement audit reports on whether your financial statements are fairly stated and free of material misstatements. Without this report, your reviewed financial statements lose their credibility.

Financial statement audits verify your reported performance and financial position. They also corroborate your own findings to ensure that you’re on track to maintain your continued highest profitability. Hiring a CPA firm in NYC like Buddha Tax and Accounting CPA can pay dividends by finding any problems or mistakes before they become unintended disasters. There are two main accounting frameworks that have made audited financial statements more common:

1. Generally Accepted Accounting Principles (GAAP)
2. International Financial Reporting Standards (IFRS)

THREE STAGES OF AN AUDIT

Buddha Tax and Accounting CPA follows three primary stages for any financial audit:

1. Risk assessment and planning:

At this beginning stage, your auditor spends time learning about your business and business environment. This preliminary work helps your auditor gain an understanding about the way your business operates. The information helps the auditor assess potential risks that can adversely affect your audited financial statements.

2. Testing internal controls:

This stage assesses your company’s suite of controls. Your auditor commonly uses risk assessment questionnaires to test your internal controls, focusing on areas like

• How well you safeguard your assets
• Whether proper authorizations are in place
• If you have a clear segregation of employee duties

Assessing your internal transactions candetermine your company’s degree of effectiveness and control. Positive results mean the audit can go faster. If the potential for errors or misstatements are found, your auditor has to dig deeper to find the problem areas. This process, remember, only results in making your organization stronger.

3. Substantive audit procedures:

The last stage includes an array of procedures and financial statement reviews, such as:

• Cash review, to count your on-hand cash, review your bank statements, issue bank confirmations and check for restrictions on bank balances
• Analysis, which looks for anomalies by comparing your current finances with forecasted, historical and industry results
• Accounts receivable, an investigation of your collections, cutoff procedures and year-end sales, while confirming the balances in your accounts
• Marketable securities, that reviews your transactions, confirms your securities and verifies the market value
• Inventory, to obtain proof of your inventories, observe an inventory count, inspect shipping and receiving procedures, test your calculated overhead allocation, examine invoices, review production costs and trace inventory costs
• Accounts payable, which tests your year-end cutoffs while confirming all accounts
• Fixed assets, a review of your leasing documents, assets, authorizations for purchase and disposal, appraisals, amortization and depreciation
• Debt, which examines your lease agreements, obtains confirmation with your lenders and reviews the minutes from your board of director meetings
• Accrued expenses, to compare your balances to the previous year’s, examine subsequent payments and re-compute accruals
• Expenses, a review of your transactions and expenses, while confirming any abnormal items with outside vendors and suppliers
• Revenue, which examines sales documents, including transactions and sales returns in the last year

BENEFITS OF FINANCIAL STATEMENT AUDITS

For publicly-held companies, shareholders generally appoint the auditors. Public companies’ audited statements become part of their public record. Even some private companies choose to release their financial statement audits.Audits can deliver many benefits beyond assuring investors, stockholders and lenders, however. One advantage of a rigorous audit is that it provides insight into your firm’s management, highlighting areas that may improve the company’s processes or controls. Your top accountant in New York, Buddha Tax and Accounting CPA auditor must communicate any negative aspects of their audit, like control deficiencies, to you. These reports enhance processes within the business, adding value to your company and aiding in your strategic planning processes.

AUDITED FINANCIAL STATEMENTS FOR OTHER ENTITIES

Nonprofit or tax-exempt organizations must file Form 990 with the IRS. Private foundations file Form 990-PF (Private Foundation). While financial statement audits are required for all publicly held companies, other businesses and entities can benefit from a financial statement audit. Nonprofits in particular receive the following nonprofit audited financial statements:

• Balance sheet: — or statement of financial position — is a summary of the liabilities, assets and net assets of your institution at a specific date.
• Cash flow statement: summarizes the resources available during its reporting period. The report tracks income and expenses. Projected cash flow statements show shortfalls during the budget and strategic planning process.
• Income expense statement: — or statement of activity — documents your organization’s financial activity over the course of a year or longer, reporting income minus expenses to show profit or loss.
• Functional expenses statement: reports expenses related to support and program services. Program service expenses are divided by your institution’s programs — such as management expenses.

FINANCIAL STATEMENT AUDIT COSTS

Hiring an auditor is a business decision, but cost isn’t the only factor. Find an auditor with experience and integrity — someone like the auditing professionals at Buddha Tax and Accounting CPA who sees the big picture. There are three layers of financial statement examinations:

• Compilation: information gathering
• Review: cursory examination of the data
• Audit: a detailed review of your finances

Compilations are the least expensive option, and audits cost the most, but as is so often the case in the business world, you get what you pay for. Auditors have to adhere to stricter standards of the Public Company Accounting Oversight Board (PCAOB), and these standards take longer and are more expensive to complete. If you’re not sure what you need, talk to Buddha Tax and Accounting CPA for straight talk about your financial statement review.

CERTIFIED AUDIT

If you own or operate a nonprofit company or church, your state may require you to have a certified audit of your institution. Certified audits are a way to protect public trust in many nonprofit organizations. The IRS doesn’t require certified audits, but they are mandated by Attorney Generals of many states. But even if you aren’t a nonprofit or a church, a certified audit gives you a snapshot of your organization’s financial health.

Buddha Tax and Accounting CPA delivers trust and transparency with every certified audit. We are NY Certified Public Accountants, a top rated CPA New York firm.

Some states require a certified audit for specific conditions, such as when your organization has received:

• Gross contributions over a threshold amount, typically in the range of $200,000
• An excessive amount of funds from a professional fundraiser
• Contributions from the sale of merchandise, services provided and cash donations

Your institution can incur penalties from these states if you do not comply with these rules. You must send the results of a certified audit if your state requires it. Penalties include losing your right to solicit funds in your state. Certified audits are generally kept on file at your state’s Attorney General’s office.

WHAT IS A CERTIFIED AUDIT?

A certified audit is a procedure for reviewing your organization’s state tax return, including the income and expenses. The experienced certified public accountants at Buddha Tax and Accounting CPA with office locations in NYC and Queens provide their professional opinion on whether your financial statements match up with the financial position of your institution. Your financial statement includes the statement of activities, statement of financial position, cash flow statement, and any notes that pertain to those statements.

Accounting firms like Buddha Tax and Accounting CPA are qualified to assess your company’s finances. They follow auditing standards to test and analyze your financial records and accounts. The best rated CPAs in NYC at Buddha Tax and Accounting CPA perform your certified audit according to these strict standards.

If your organization has voluminous transactions, it may not be possible for a qualified accountant to test them all or to be completely knowledgeable of all your company’s activities. If this is the case, your CPA checks a random sampling of your transactions and then presents a statement attesting that they are reasonably assured that your financial statements are accurate. While no CPA could say definitively that your financial statements are perfect in this instance, it’s safe to say that your financial position seems to be fairly represented by your financial statements.

HOW TO DETERMINE IF YOU NEED AN AUDIT

Call Buddha Tax and Accounting CPA at 347 703 9019 to find out if your organization needs a certified audit. A personal, top NYC CPA can answer your questions while asking several — all in service to help you make the correct decision. When you call, be ready to answer several questions, such as:

• Does your bank loan have a stipulation that requires an audit?

It’s a common requirement of loans provided to churches and nonprofits.

• Does your organization or by-laws mandate an audit?

If so, contact the top New York accountant Buddha Tax and Accounting CPA for a timely and thorough certified audit.

• Does your organization or by-laws mandate an audit?

If you are — and your project will be financed by a bank loan, it’s likely the bank will ask for audited financial records and statements. It often helps your ability to qualify for the loan if you provide them with a prepared audit. Otherwise, you may appear unprepared if you meet with a lender without one.

• What’s the size of your organization?

When an institution grows to a certain size, it’s advisable to have outside professionals like Buddha Tax and Accounting CPA conduct accounting or audit services. The rule of thumb is to hire a best CPA in NYC to conduct an audit if your organization has gross income of $1 million or more. If your organization brings in this much revenue, you’re now a viable entity in the business community, so you’re expected to conduct professional and ethical business practices. This typically includes having audits of financial statements.

• Does your institution receive private or government grants?

  Or are you preparing to apply for one? Most granting agencies only release funds after receiving your certified audit.

When your organization reaches a certain size, you’ll find many reasons to get a certified audit. It’s unavoidable. With smart planning, you can anticipate the requirement for an audit and build the cost of a certified audit into your budget. Not all institutions in the Manhattan and New York City metropolitan area require a certified audit, so if you’re unsure, consult with Buddha Tax and Accounting CPA for answers and a path toward financial success. During the process of determining if you need an audit, your CPA ascertains whether you need other accounting services. This isn’t a sales technique; it’s a way to find other important tools to help you sustain the growth that you’ve worked so hard to achieve.

BENEFITS OF CERTIFIED AUDITS

It may seem on the surface that others — bankers, investors, donors and accountants, for example — benefit from a certified audit. But your organization benefits too. Having a certified audit done can:

• Provide comfort and peace of mind to you, your executives and your stakeholders when everyone involved in your organization knows that a third party can come in to inspect your financial records. It gives your management accountability and credibility.
• Clean up your records and books at least once a year. It’s easy for any business to get behind on financial statements and records, but falling too far behind in recordkeeping can severely threaten your finances. Having a NYC CPA auditor visit once a year helps keep your financial records on schedule and in order.
• Help your organization keep up-to-date on accounting, legal and tax issues. Trust your financial records with the professionals from Buddha Tax and Accounting CPA. They’re aware of all the tax laws and modifications to the rules that affect your financial statements and your unique situation.
• Produce a comprehensive management letter, which compiles all the findings of the CPA audit team — including the results of questionnaires, interviews and transaction testing. This letter illustrates strengths and weaknesses of your organization’s financial status, as well as suggestions for improvements. A comprehensive management letter can help you manage your finances in the future to allow for more profit and accountability.