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 Audit of Financial Statements
An audit provides the highest level of assurance that the financial statements fairly represent the entity's financial position and results of operation in accordance with generally accepted accounting principles. The objective of an audit is the expression of an opinion about the financial statements of an organization. The opinion indicates whether the financial statements are free of material errors or irregularities and are prepared in conformity with accounting principles generally accepted in the United States of America.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; therefore, an audit will involve judgment about the number of transactions to be examined and the areas to be tested, based on the auditor's understanding of the organization's internal controls system. An audit of financial statements may be conducted in accordance with various standards, as follows:
 Generally accepted auditing standards
Generally accepted government auditing standards (the yellow book)
Office of Management and Budget (OMB) Circular A-133
Our firm conducts audits in accordance with all the above standards.
Since an audit of financial statements includes review and understanding of internal controls system, it may result in the issuance of a management letter. A management letter is addressed to the board of directors, explains weaknesses in the system of internal controls that have come to the auditor's attention and may include recommendations.
Review of Financial Statements
A review of financial statements consists primarily of inquiries of the organization's personnel and analytical procedures performed on the financial statements provided by management to determine if they are reasonable. With respect to reliability and assurance, a review falls between a compilation, which provides no assurance, and the more extensive assurance of an audit.
A review does not involve obtaining an understanding of the internal control structure of the organization, or tests of accounting records through obtaining evidential documents. Thus, a review does not provide assurance that an independent accountant will become aware of all significant matters that would be disclosed in an audit. A review engagement cannot be relied upon to disclose errors, irregularities, or illegal acts, including fraud or defalcations that may exist. However, the independent accountant is obligated to inform the appropriate level of management of material errors, and any irregularities or illegal acts, unless they are clearly inconsequential, that come to his/her attention.
Due to the limitation in scope of work, in a review engagement, the independent accountant does not express an opinion regarding the financial statements taken as a whole.
Compilation of Financial Statements
A compilation involves preparation of financial statements from information provided by the organization's management. A compilation is useful when in-house capabilities for preparing financial statements are limited.
In a compilation engagement, all the initial accounting records are processed by the organization. The independent accountant compiles the financial statements in a form that is in accordance with generally accepted accounting principles.
A compilation is limited to presenting in the form of financial statements information that is obtained by the independent accountant from the management of an organization. It does not include any procedures performed in an audit or review engagement, or the expression of an opinion or any other form of assurance on financial statements.
Tax Return Preparation
Following are the income tax returns relevant to nonprofit organizations that our firm prepares:
Federal form 990 and 990-EZ - Return for all nonprofit organizations other than private foundations
Federal form 990T - Return for unrelated business income
Federal form 990PF - Return for private foundations
State of California form 199 - Return for all nonprofit organizations in the California
Our firm uses judgment in resolving questions where the tax law is unclear or where there are conflicts between taxing authorities, interpretations of the law and other supportable positions. Unless otherwise instructed by the client, we will resolve such questions in the organization's favor whenever possible.
Consulting Services
Our firm provides a variety of consulting services. We use our cumulative knowledge and experience to bring the best recommendations to our clients in each and every engagement. Our services include but are not limited to:
Financial management services
Preparation of accounting policies and procedure manual
Indirect cost proposals and studies
Internal control review and analysis
Audit preparation assistance
Organizational budget and cash flow projection
Evaluation of accounting needs and effectiveness of staff
Designing chart of accounts and financial statement formats
Review of effectiveness of accounting procedures
Accounting services
Monthly bookkeeping services including issuing checks, making deposits, preparing payroll
and preparing financial statements for management use only.
Information systems
Software evaluation, installation and training.
Computer security review
Tailored training services
Training for administrative assistants to become effective bookkeepers
Training for bookkeepers to become effective financial managers
Training for executive directors to become effective managers
Training board of directors on their financial management responsibilities
Other services
We provide the following services in partnership with RAS Management Services. The principal of RAS Management Services is Rick Smith. Rick Smith has over twenty years of experience in the field of nonprofit management and organizational development, along with a wealth of senior management and consulting experience with nonprofit organizations. During his fifteen years as the CEO of the Support Center of San Francisco (now CompassPoint) and the Support Centers of America, a national nonprofit organization dedicated to increasing the effectiveness of nonprofit organizations through the delivery of management support services, Rick was recognized as a national leader in the field of management support for nonprofit organizations. He was a primary developer of training curricula and materials in the areas of strategic planning, organizational assessment, fund raising, and governance; in addition he has conducted hundreds of management training programs across the country on these topics. During the last five years, Rick has focused his consulting practice in the areas of strategic planning, governance, organizational assessment/development, and leadership development (including executive transitions).
Strategic and operational planning
Board and leadership development
Organizational assessment
Needs assessment
Executive transition
Compensation assessment
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