Auditing Services

Auditing is one of the most important and best-known services CPAs provide. There are over 15,000 publicly owned companies in the United States whose stock is held by approximately 51 million shareholders. Such companies are required to issue annual financial statements that are audited by an independent CPA to reasonably ensure that they fairly present the company's financial position and the results of its operations. Audits are also conducted for privately owned businesses, not-for-profit organizations, and governmental units. 

The CPA performs each audit in accordance with generally accepted auditing standards that provide assurance to the public that the audit has been conducted in a professional manner. 

At the end of the auditing process, the CPA, exercising professional judgment and drawing upon his or her knowledge of the business, reaches a conclusion about the financial statements. This is the opinion expressed in the auditor's report. If the auditor finds the financial statements are fairly presented in conformity with generally accepted accounting principles, the CPA can issue a "clean" or unqualified opinion. In some very serious cases, the auditor may issue an adverse opinion or withdraw from the engagement. Publicly held companies must explain all the circumstances concerning a change in auditor to the Securities and Exchange Commission. 

Compilation and Review Services 

Privately held companies often ask CPAs to perform compilation or review services instead of an audit. During a compilation, the CPA becomes familiar with the nature of a client's transactions, then compiles the company's financial data into a financial statement format. The CPA does not express any opinion on their conformity with generally accepted accounting principles.

A review does provide a limited degree of assurance that the business' financial statements are in conformity with generally accepted accounting principles. During a review, the CPA makes inquiries into such matters as accounting principles and methods, record-keeping practices, and actions of the board of directors.

Other services CPAs provide:

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