Full Newsletter   Newsletter Archives



Printable version 

The Statements on Auditing Standards No. 104 -111 are now effective for audit periods beginning on or after December 15, 2006. While these standards have increased the time we invest in the planning phase of your audits, there are benefits both to you, as the auditee and to us, the auditor.


In the past, we were only required to gain a basic understanding and knowledge of your business, industry and internal control over financial reporting and safeguarding of assets. Now, we must understand your business better, including understanding the effect of the overall economy, the effect of the regulatory environment and other factors that you must live with in your business. Your internal control system is very important to our audit procedures. We are now required to document the control steps and determine whether or not your stated internal control features have been implemented.


How do you the benefit from the change? First, as one of our experienced auditors stated after completing his first audit under these standards, "I know more about the client's business than I ever knew. When they call me now for advice, I will be able to give them better help because I will understand why they are asking the questions."


The audit cost will go up, but the knowledge we have of your business will benefit you when you need help. If you really do not want to pay more for your audit and you do not have an outside requirement for an audit opinion on your financial statement, you can reduce your level of service to a review report. Check with your banker to find out it a review would meet their needs to service you.


Feel free to contact your Rea Associate to discuss these new standards and how they will impact your audit.


-By David Spar, CPA (Wooster office)


 Save article  Email Firm  Email to a Friend
Is this item worthy of implementation? Yes No Maybe
Is this item worth sharing with other associates? Yes No Maybe
Did this item present value to you and your business? Yes No Maybe
Comments:

We take great care in the preparation of our articles and announcements. We also have a process of reviewing articles when major changes take place. The business, legal and tax climate is constantly changing especially when reviewed on an industry basis.

It may be very important to consult with us or your Investment Advisor before implementing ideas contained in articles and announcements. Many ideas have complexities and nuances that cannot be adequately detailed in the articles or announcements. We are not responsible for errors, misinterpretations or omissions related to these articles or announcements. Nor are we responsible for the applicability to your personal, business or tax situation.

Pursuant to Circular 230 promulgated by the Internal Revenue Service, if this email, or any attachment hereto, contains advice concerning any federal tax issue or submission, please be advised that it is not intended or written to be used, and that it cannot be used, for the purpose of avoiding federal tax penalties unless otherwise expressly indicated.