Financial statements carry different levels of credibility depending on the level of independent CPA involvement. A lender, investor, government agency, or grant funder who receives financial statements wants to know: how confident can I be in these numbers? Audit, review, and compilation services exist to answer that question — each at a different level of scrutiny and cost.
FJ & Associates, PLLC provides all three levels of assurance services for Utah businesses, nonprofits, and organizations that need their financial statements validated by an independent CPA.
📞 (801) 927-1337 | ✉️ admin@cpaone.net
The Three Levels of Financial Statement Assurance
Compilation
A compilation is the lowest level of assurance service. The CPA assists in presenting financial information in financial statement format but does not independently verify it. A compilation is appropriate when a lender requires financial statements but does not specify audit or review, or when internal management needs financial statements in a formal format.
Review
A review provides limited assurance — the CPA performs analytical procedures and inquiries to identify whether financial statements appear materially misstated. Reviews are appropriate when a bank or lender requires more than compiled statements, or when a business partner or investor wants moderate confidence in the financials.
Audit
An audit provides the highest level of assurance. The CPA obtains reasonable assurance that financial statements are free from material misstatement — through evidence gathering, testing of transactions and balances, confirmation with third parties, and assessment of internal controls. Audits are required when:
- Federal or state grants require them (Single Audit under Uniform Guidance for federal awards over $750,000)
- Bond covenants or loan agreements specify audited statements
- Nonprofits above certain revenue thresholds face state audit requirements
- A business is preparing for acquisition and the buyer requires audited financials
Nonprofit Audit Requirements in Utah
Nonprofit organizations in Utah face specific audit requirements based on annual revenue:
- Under $500,000 in gross revenue — audit generally not required by Utah state law; may be required by specific grant funders
- Over $750,000 in federal awards in a single year — Single Audit (OMB Uniform Guidance) required
- Individual grant requirements — many state and private foundations require audited statements regardless of revenue level
Our team has significant experience with nonprofit audits, including the specific requirements of low-income housing tax credit (LIHTC) projects.
What the Audit Process Looks Like
Pre-Audit Planning — We discuss your accounting system, internal controls, significant transactions during the period, and any areas of complexity or risk. We provide a prepared-by-client (PBC) list of documents and schedules you’ll need to provide.
Fieldwork — Our team tests transactions by sampling, confirms balances with third parties (banks, lenders, major customers and vendors), and evaluates internal controls.
Draft Financial Statements and Report — We prepare or review your financial statements and issue a draft audit report. Any adjusting entries needed to correct the statements are discussed before finalization.
Final Report Issuance — The final audited financial statements and audit opinion are issued. For nonprofits, this includes the required supplementary schedules.
Internal Controls Assessment
As part of our audit and review engagements, we assess your internal controls. Common internal control weaknesses we identify:
- Single person controlling cash receipts, deposits, and bank reconciliation (no segregation of duties)
- No approval workflow for vendor payments above a threshold
- Blank check stock accessible to unauthorized employees
- No periodic physical inventory counts
- Credit card expenses approved by the same person incurring them
Connecting Assurance to Business Goals
Audited financial statements open doors with lenders, support business sale transactions, build donor and grantor confidence for nonprofits, and protect owners from internal fraud.
Ready for Audit, Review, or Compilation?
📞 (801) 927-1337 | ✉️ admin@cpaone.net | 612 N Kays Dr Suite 120, Kaysville, UT 84037
Missy Dennis, CPA | Partner | FJ & Associates, PLLC | Kaysville, Utah
Missy holds a Master of Accounting degree from the University of Utah and is a licensed Certified Public Accountant. With more than twenty years of public accounting experience, Missy specializes in tax preparation and advisory, bookkeeping strategy, estate and trust taxation, audit and consulting services, and small- and mid-sized business advisory.
