CPA SERVICES LEVEL
CPA’s may render three levels of service with respect to an association’s financial statements.
The CPA compiles information in the form of financial statements. Such information is specifically the representation of management of the association. The CPA takes little responsibility for these statements, is required to perform very few procedures, and gives no assurance as to compliance with generally accepted accounting principles (GAAP). The CPA is not required to be independent of the associations, but must disclose if he or she is not independent.
The CPA performs limited procedures, consisting primarily of inquiries and analytical procedures; and provides negative assurance to the Association that financial statements are properly prepared in accordance with (GAAP). This level of service requires familiarity with the industry by the CPA and that the CPA be independent with respect to the association.
The CPA performs an examination of the financial statements, and issues a positive statement as to their compliance with GAAP. Extensive procedures are performed. This level of service requires more extensive industry knowledge by the CPA, and that the CPA be independent with respect to the association.
MAINTAINING BUSINESS ACCOUNTS
is important to avoid tax audits. If you have maintained day to day accounts for the whole year, it helps you report your full income while filing tax returns. However, small business owners are often negligent toward regular accounts maintenance. A CPA can help you with this by offering two important sets of services – bookkeeping and financial accounting.
A business owner must be familiar with the tax deductions that are legal and those, which are not. A CPA has in-depth knowledge about various deductions that can reduce the burden of tax for a small business owner. At the same time, a CPA has information about deductions that are invalid and should not be included in the tax return documents.