Audit and Review Preparation Cumming, GA

Audit is the highest level of CPA assurance. The audit team performs detailed testing of transactions, confirms balances directly with banks and customers, and issues an opinion on whether the financial statements are fairly presented in accordance with GAAP. Audits are required for many nonprofits with state or federal grant funding, for some commercial loans above certain thresholds, and for businesses preparing for sale or major investment.

Review is a middle level of assurance. The CPA performs analytical procedures and inquiries (but not detailed transaction testing) and issues a limited assurance opinion. Reviews are commonly required for nonprofit boards, mid-size commercial loans, and contractor bonding above certain levels. Reviews cost roughly half of an audit and serve well when full audit assurance is not required.

Compilation is the lowest level of assurance. The CPA assembles the financial statements from the client's books and issues a report stating no opinion was expressed. Compilations are commonly required for smaller commercial loans and for certain regulatory filings. Compilations cost a fraction of audits or reviews.

For Cumming clients unsure which level they need, the requirement usually comes from a third party (lender, board, regulator, grantor). The third party specifies which level is required; we coordinate with them and your CPA to confirm before starting prep work.

Every balance sheet account reconciled with supporting schedules: the cash balance ties to bank reconciliations; A/R ties to the aging report and to underlying invoices; inventory ties to a physical count and the inventory subledger; fixed assets tie to the fixed asset register with depreciation calculated; loans tie to amortization schedules from the lenders; equity rolls forward correctly from prior year through current activity to ending balance.

Every significant journal entry documented with the underlying business reason and supporting calculation. Year-end accruals (accrued payroll, accrued vacation, accrued bonuses) supported by the underlying calculation. Depreciation entries supported by the fixed asset register. Owner draw entries supported by the cash transactions. The audit team should be able to trace any number on the financial statements back to source documentation in one or two clicks.

PBC (Prepared by Client) list completed: most audit teams send a 30 to 80 item list of documents and schedules they need on day one of fieldwork. Without prep, this list takes the client 40 to 80 hours of nights and weekends to assemble during fieldwork, which is when audit fees balloon and audit timelines slip. With prep, the PBC binder is delivered on day one and the audit runs on schedule.

Critical: we are not your auditor. Independence requirements prevent the same firm from preparing the books and auditing them. Our role in audit prep is to make your books audit-ready before the independent CPA team arrives. The CPA team performs the audit; we are your in-the-trenches partner during the prep and during fieldwork.

Most Cumming-area audit prep engagements partner us with a CPA firm in Atlanta or the north metro that does the actual audit. We coordinate directly with the audit team's senior, partner, and sometimes the manager, providing PBC items as requested, answering questions about specific transactions or balances, and resolving any issues that come up during fieldwork. The independent CPA still owns the audit opinion; we own making the audit go smoothly.

For first-time audits (a Cumming nonprofit going through its first board-required review, a contractor crossing into bonding requirements for the first time), the prep work is heaviest because some of the supporting schedules and reconciliations may not have been built yet. We expect this and quote the engagement accordingly.

Audit and review preparation is priced as a fixed-scope project after a quick diagnostic of the current state of the books. For Cumming clients with monthly bookkeeping with us already in place, prep is usually $1,500 to $4,000 because the books are already in good shape. For first-time audits or clients whose books need significant prep work, the engagement runs $4,000 to $12,000 depending on the size of the business and the gap between current state and audit-ready state.

The cost of prep is almost always less than the cost of going into an audit unprepared. Audit firms bill prep work at premium hourly rates during fieldwork (often $200 to $400 per hour) and rushed prep often produces errors that compound the audit cost. A clean prep saves the client multiples of the prep fee in audit fees and stress.