Audits, Reviews & Compilations Fundamental Differences in Audit, Review, and Compilation Engagements In all three types of engagements, Beneby & Company is supposed to sniff for anything that smells peculiar. As a matter of fact, in all our work we are supposed to sniff. Sniffing is not a procedure. It is a pervasive requirement and attitude. It is called professional skepticism.   In a compilation engagement, Beneby & Company is supposed to sniff. But we are not required to perform any procedures unless we smell something “funny,” or worse, in a financial statement. In that case we are supposed to look into what smells and get some more information or, as the need may be, cause management to make or agree to corrections. Otherwise, we are not required to go beyond sniffing.   In a review engagement, Beneby & Company goes beyond sniffing and is required to perform so called inquiries and analytical procedures, i.e., we are supposed to ask some questions and compare this year’s numbers in the financial statements with other numbers. If the answers to our questions, or the comparison of the numbers, cause us to wonder about some of the figures in the financial statements, we are supposed to follow through with other procedures and, if need be, cause management to make or agree to corrections. Following through may consist only of asking some more questions. On the other hand, if we do not get good answers, it may cause us to perform some verification procedures. But these additional procedures are performed only in connection with the figures we are wondering about. Otherwise we are only required to ask questions and compare numbers.   In an audit engagement, Beneby & Company also sniffs, asks questions and compares numbers. But, in addition, we have to feel, touch and taste, so to speak. Beneby & Company has to examine the evidence; we have to get the facts. But, for the greatest part, we only have to examine a portion of the evidence, a sample of it, sometimes and a very small sample. Beneby & Company must do some testing. For examples: usually we reconcile (tests the reconciliations of) some bank accounts; we asks some customers to verify their balances; we observes and test-counts some inventory items; we searches for some unrecorded liabilities; we examines and compares with the accounting records, some sales invoices, some purchase invoices and some expense invoices. When we perform these types of auditing procedures, sometimes he may be required to dig deeper, depending on our findings.   Fundamental Differences Between Audit, Review, And Compilation Reports   Upon completion of our engagement, Beneby & Company renders our report. This report broadly states what we have done and the conclusions we have reached. In an auditors’ standard report, Beneby & Company expresses reasonable assurance about whether the financial statements are free of material misstatement. Beneby & Company expresses reasonable assurance because we cannot express absolute assurance since we have only examined a portion of the evidence, sometimes a very small portion.   In a reviewers’ standard report, Beneby & Company only expresses limited assurance that insofar as we are aware, the statements do not require any material modifications. The assurance is limited because the procedures are so limited.   In a compilers’ standard report, Beneby & Company expresses no assurance because we have performed no procedures upon which any assurance can be based.   None of these reports offers complete or absolute assurance that the financial statements are fairly presented. Our fees are usually on time spent based upon the hourly rate of the employees assigned to your engagement, plus out-of pocket costs.  However, we do quote fixed or project fees if we are realistically able to estimate the time to complete the assignment. Call or email us today at 242-341-5475 or benebyandcompany@coralwave.com.