AUDIT APPROACH AND USE OF TECHNOLOGY
Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts, tests of the physical existence of inventories, and direct confirmation of certain assets and liabilities by correspondence with selected customers, creditors, and financial institutions. We will also request written representations from your attorneys as part of the engagement, and they may bill you for responding to this inquiry. At the conclusion of our audit, we will require certain written representations from you about the financial statements and related matters.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; therefore, our audit will involve judgment about the number of transactions to be examined and the areas to be tested. We will plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether from (1) errors, (2) fraudulent financial reporting, (3) misappropriation of assets, or (4) violations of laws or governmental regulations that are attributable to the entity or to acts by management or employees acting on behalf of the entity.
Because an audit is designed to provide reasonable, but not absolute, assurance and because we will not perform a detailed examination of all transactions, there is a risk that material misstatements may exist and not be detected by us. In addition, an audit is not designed to detect immaterial misstatements or violations of laws or governmental regulations that do not have a direct and material effect on the financial statements. However, we will inform you of any material errors that come to our attention, and we will inform you of any fraudulent financial reporting or misappropriation of assets that comes to our attention. We will also inform you of any violations of laws or governmental regulations that come to our attention, unless clearly inconsequential. Our responsibility as auditor is limited to the period covered by our audit and does not extend to any later periods for which we are not engaged as auditor.
Our audit will include obtaining an understanding of the entity and its environment, including internal control, sufficient to assess the risks of material misstatement of the financial statements and to design the nature, timing, and extent of further audit procedures. An audit is not designed to provide assurance on internal control or to identify deficiencies in internal control. However, during the audit, we will communicate to you and those charged with governance internal control related matters that are required to be communicated under professional standards.
The use of technology for this engagement will include various interactive spreadsheets in order to prepare the financial statements and supporting work papers. Sage Business Works is your existing accounting software and does not appear to interact directly with our existing programs. However, we are experienced in using Sage Business Works software for report generation.
QUALITY CONTROL AND PEER REVIEW
Mr. Masini has also been responsible for all Firm and previous firm quality control and peer review requirements. It is important to note that in ALL instances in which a peer review engagement has been performed the firm has received an unqualified opinion and no letter of comments. The peer review will be performed by Mr. Bob Hoerr, CPA located in Lakewood, Colorado (303) 239-8706.
There are currently no complaints nor have any complaints ever been filed with the Colorado Society of Certified Public Accountants or any other regulatory agency regarding Mr. Masini.
AUDIT FEES AND BILLING RATES
Our fees are based on actual hours spent at our standard hourly rates. In order to take advantage of the efficiencies that occur with multiple year engagements we have provided you with a proposal for the years ended December 31, 2013 and 2014. We believe the audit fee for these engagements not exceed $10,750 per year which includes preparation of the required communications under Statement on Auditing Standards No. 114 – The Auditor’s Communication with Those Charged with Governance (SAS 114) and Statement on Auditing Standards No. 115 – Communicating Internal Control Matters (SAS 115).
Our fee is based upon anticipated cooperation from your personnel and the assumption that unexpected circumstances will not be encountered during the engagement. If significant additional time is necessary, we will keep you informed of any problems we encounter and our fees will be adjusted accordingly. Our fees for these services are due upon presentation to the Board of Directors.
Our governmental hourly billing rates for professional staff have remained constant since inception and are as follows:
- Principal: $150
- Audit professional: $115
- Tax professional: $115
- Bookkeeper: $50
- Administrative support: $35
ADDITIONAL SERVICES PROVIDED
We stand ready to assist you with the preparation of your annual budget. We will charge for these services at our standard hourly rates listed above.
Upon completion of the audit we will present the financial statements, management letter and other required communications to the Board of Directors and/or Board Finance Committee. We anticipate and encourage your input. We will make ourselves available to attend any subsequent Board of Director and/or Board Finance Committee meetings upon request at no additional charge.
COMMUNICATION WITH ORGANIZATION MANAGEMENT AND PERSONNEL
We will fully discuss any and all adjustments made to the financials with your accounting personnel including Board Finance Committee members prior to inclusion within the financial statements. In addition, management comments and SAS 114 and SAS 115 comments will be discussed with appropriate personnel to ensure accuracy prior to inclusion in such communications.
We do not charge for phone calls and encourage our clients to contact us throughout the year with questions.
Howard W. Masini CPA, P.C. continues to grow each year since established in 2005. It is due to its recent existence that financial statement engagements continue to increase each year and no financial statement clients have been lost since the Firm’s establishment.
Howard has had no instances in which a client was not retained due to an unresolved accounting or audit matter.
We feel our audit experience provides a distinct advantage to that of similarly sized firms due to the extent of Mr. Masini’s extensive fraud investigation background. This background is evident in several of the procedures performed on financial statement engagements as well as the way in which it is communicated to members of management.