In considering your search for an audit firm in NJ there are many factors to consider such as size, types of industries, specialized industries and more. And any firm should have continued investment in its people and should be in the forefront of technological advancement.
What are your needs for an audit and why do you need an audit firm in NJ?
To begin with, evaluate your business needs. What to consider are those that pertain to:
- Your industry
- Operational structure
- Your size in terms of gross revenues, number of employees, assets
- The stage of growth that your business is in
- Additional services needed - taxation, employee benefit plans, business valuations
- SEC or other regulatory requirements
- Audit, review, or compilation level of attestation services
- Concern for specific accounting changes such as the new lease accounting requirements
What do you look for in an audit firm in NJ?
Once you determine your requirements for an audit, what do you look for in an audit firm?
- Their focus on quality, integrity, professionalism, independence and objectivity
- Their size as adaptable to your needs
- Audit innovation
- Specializations
- Their people; additional investment in expertise and technology
Why do you need an audit of your financial statements?
The responsibility of any audit is to both serve the public interest and to provide stakeholders with a quality audit product. Audits are also used for regulatory compliance, lender requirements, internal control evaluations, systems examinations, and other reasons. An audit firm in NJ will have in-depth understanding of the industry in which you work. Whether it is in real estate and construction, healthcare, retail, technology, or logistics & transportation, audit firms are there with the specialization that you need for the best outcome for your accounting and auditing needs.
What happens during an audit?
During the audit, your accounting, informational technology, and internal control processes are evaluated. Are your employees performing tasks that fit their job descriptions? Are there areas where improvements can be made to develop efficiencies? Are one or two people controlling the whole operation? And if so, what improvements can be made so that your company's assets are not exposed to unnecessary risks? Are there compliance issues needing to be addressed?
The audit process will evaluate your technology that you have in place. Is it functioning as intended? Are improvements needed due to age, inefficiencies, or holes in the safeguards needed to protect your data?
The auditors will recommend solutions based upon their expertise in your particular area. Your audit team will provide you with a recommendation letter outlining areas of improvements that are possible, as noted during the audit.
Part of any audit, is a comparison of your business to that of your competitors. This important tool can point out errors or inefficiencies in your operations and record keeping. Lenders, rating services, and investors use these results, as well, to compare your company's statistics to those in your industry.
Integral to an audit are your company's taxes. Included in any set of financial statements are both an income tax expense and a liability amount. As part of the auditing of these numbers, your income tax returns will be reviewed. It is important that your audit firm in NJ have income tax expertise. They will determine that the tax returns have been properly filed, and that your income tax expense and liability have been properly recorded.
How do you know what services will be performed and how much it will cost?
Prior to beginning any work, an engagement letter will be prepared by your audit firm in NJ. The letter outlines the objectives of the audit, the procedures to be performed by the auditors, and the responsibilities of management. In a separate fee agreement letter, the auditing firm will outline how fees are to be charged by the firm, and how payment is to be made by the client.
Your audit firm in NJ will then develop an audit plan relative to your company and industry; taking into account your business operations, any unique risks, and distinctive operating processes. The auditing firm will have automated risk assessment tools, audit planning and assessment programs to facilitate their audit.
They will have experience to perform an audit that is both timely and cost effective. Your audit firm in NJ will respect your timeline and budget, and strive to meet any fee agreements made for the audit.
An audit of your financials should provide not only meaningful audited financial statements, but an evaluation of your company's financial procedures which produces thoughtful and useful suggestions of operating inefficiencies, potential inadequacies, and suggested improvements.
What is the level of attestation service that you need?
Is it a full-blown audit of your financial statements to fulfill regulatory, lender, or shareholder requirements that you need? Or is a compilation or review sufficient?
Reviews provide the next level of assurance of financial information as compared to an audit. Some private investors, creditors, and shareholders require less assurance than a complete financial statement audit.
The financial statement review process is less extensive than a full audit, but is more comprehensive than a compilation. The review is designed to evaluate whether your accounting principles that you use are in accordance with GAAP (Generally Accepted Accounting Principles) and that the financial statements taken as a whole are free from material misstatements.
Compilations are performed to provide the lowest level of attestation. A compilation is a service, the objective of which is to assist management in presenting financial information in the form of financial statements without providing any assurance that there are no material modifications. No analytical procedures are performed nor are internal controls evaluated. A compilation basically assists management in the preparation of the financial statements into a financial statement format.
Do you need an audit firm that can handle your public company?
If so, the firm needs to be registered with the Public Company Accounting Oversight Board (PCAOB). This registration is needed to file with the Securities and Exchange Commission (SEC).
Do you need a specialized audit, such as an ERISA audit?
Does the audit firm in NJ specialize in this type of audit? There is a web of regulations that must be met to stay in compliance with the ERISA laws. By having your retirement plan audited, you can address any compliance gaps and be prepared for any Department of Labor (DOL) audits.
Are there additional services that you need from your audit firm?
In the current environment there is more demand for predictive information about a company's future financial position. Do you need this service, and can your audit firm in NJ provide this service for you? Do you need taxation planning and preparation? Do you need employment benefit assistance for health insurance, employee benefit plans, or time keeping software selection?
Your audit firm in NJ should be able to provide you with services beyond your audited financial statements. They will bring credibility to your financial picture. They will be able to communicate information clearly and objectively and in a way that makes your data easy to understand. The insight that they provide will improve your business in a cost effective manner.