American Institute of Certified Public Accountants


Certified Public Accountants offer audit attest services to independently verify by inspection, by confirmation, through discussion with management and outside professionals, through assessment of internal controls and by analytical and substantive procedures that the entity's financial statements including referenced footnotes detailing accounting methods and policies are materially correct. Audits test financial information against Generally Accepted Accounting Principles (GAAP) to assure that applicable accounting standards are followed. Procedures typically performed in an audit environment include an assessment of internal accounting controls, verification of material balance sheet and profit and loss items, substantive procedures applied to cash, receivables, inventory, long-term assets, accounts and notes payable, income tax calculations, equity transactitons, Board of Directors minutes and much, much more.

The American Institute for Certified Public Accountants (AICPA) has provided audit guidance for member CPA firms since 1936 and The Sarbanes-Oxley Act of 2002 has increased the complexity, intensity and cost associated with CPA audits. CPA firms are regulated by state boards of accountancy and CPA firms who conduct audits in Missouri are peer reviewed every three years to ensure generally accepted audit practices are used in the firm's audits.


A review consist predominantly of an assessment of the company's books and records by the performance of analytical tests, certain analytical procedures (such as the comparison to prior books and records), and calculation of certain financial tests and ratios. These procedures, by their very nature, are intended to give reasonable assurance rather than the detailed verification provided by an audit. Reviews are frequently requested by banks or insurance companies who want a higher degree of service/verification than a compilation, which is discussed next, but not the full extent and cost of an audit.


The lowest level of attestation services a CPA may provide is a compilation. In a compilation, a CPA assembles into the form of a financial statement the books and records of a client without performing any analytical or substantive procedures or independent verification of account balances on the balance sheet or the profit and loss statement. In addition, management has the option to also exclude from compiled statements certain statements and footnotes otherwise required in an audit or review. A compilation is solely the representation of a company's management.

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