Interested in learning more about our auditing services? You’ll certainly want a firm who has the expertise and your best interest in mind. Dawn Moore, CPA & Partner at Clements, Purvis and Stewart shares how an audit can benefit your business. From what is an audit to how it can help to how to prepare for one for your business, the process does not have to be as scary or overwhelming as it may seem. Watch below.
What is your name, title / position at Clements, Purvis & Stewart? And can you tell us a little about your background?
I am Dawn Moore. I’m a CPA partner here at Clements, Purvis, and Stewart, and I’m currently in my 38th year of public accounting. My background is in accounting and auditing. In taxation, it is in individuals, businesses, trusts and estates, and just general consultation. I’m also the quality control partner here at the firm. And with that responsibility, I am also over our firm’s peer review.
What is an audit?
An audit, by definition, is an examination of accounts or financial information. An audit is the highest level of assurance service that can be provided by a CPA. And that service allows a CPA to render an opinion on the financial statements. And it’s intended to give the financial statement users some comfort in the information and financial statements presented.
How do audits help businesses?
Audits benefit both small and larger businesses, not just because of satisfying a stakeholder’s requirement for an audit. It has both financial and non-financial benefit. So usually auditors, because they’ve attained an understanding and documented the internal control system and they’ve determined a business’s fraud risk areas, they have quite a bit of insight into what is functioning properly and what is not. So for the ones that are not functioning properly, we can consult with a business and kind of help improve those areas, make suggestions for them in those areas. And for the ones that are functioning properly, perhaps management thought they were not, and we can give confirmation that those areas are functioning properly.
Are there different types of small business audits?
For the most part, small business audits are financial statement audits. We do perform employee benefit plan audits, which are mandated by the department of labor if the plan participant level is over a certain amount. Those audits are considered more compliance driven.
How should a business prepare for an audit?
A company can prepare by thoroughly understanding its own business and its system of internal controls, and even knowing and understanding and pointing to the auditors their fraud risk areas. And the company should have its books and records up-to-date and current and have supporting documentation for its transactions and account balances. And then just be ready to participate with the auditors in answering their questions and providing any requested information.
Why are audits a necessary part of any growing business?
Usually as a business grows, so grow the needs of its stakeholders, including its bankers, creditors, suppliers, customers, insurance agents, bonding agents. And the more involved the business becomes in complex financial insurance and financing arrangements, the increase in the need for an audit. And so the audits are sometimes necessary to meet the regulations and requirements of those stakeholders. Also, sometimes audits are performed just for marketability purposes. The business owners may be looking to sell the entire business or seeking investors for a part of the business, and so they want to give those users some assurance on their financial statements, so an audit is performed.
What advice would you give to a business interested in or looking to do an audit?
I would advise a potential audit client to research and be certain of their need for an audit and of its requirement, including its due date. And then to be open-minded if an audit is required, and a CPA firm is engaged to perform your audit, to be open-minded to the suggestions that the auditors can make. They are independent experts and can target areas and provide suggestions for improvements or give confirmation where improvements are not necessary. And a full size accounting firm can provide other services besides the audit that can supplement the needs of the business so that the accounting services and tax services are not piecemealed for the client. So here at Clements, Purvis, and Stewart, for our audit clients, we serve also tax return needs, tax planning needs, business succession planning, and other general consultation needs. Of course, we would never do anything to infringe our independence or ability to perform the audit, but it would be our sincere pleasure to have you inquire on our audit service.
Contact Clements, Purvis & Stewart
Work with one of our skilled and dedicated professionals to ensure your business is prepared for the future.