Financial Statement Audit Overview
Both nonprofits and for-profit companies can find themselves in need of annual financial statement audits. At Ortega Accountancy, we specialize in efficient and effective audits for For-Profit Universities, nonprofits who need audited financial statements to comply with funding source requirements or grant writing and for-profit companies whose lenders require annual audits to comply with covenants in their loans.
We provide Single Audits Yellow Book Audits GAAS Audits GAGAS Audits
Types of Audits We Provide
We conduct Financial Statement Audits for nonprofits including but not limited to GAGAS Yellow Book Audits and Single Audits under OMB’s Uniform Guidance.
Additionally, we provide the GAAS Audited Financial for profits for loan covenant compliance and specialized comprehensive Annual Financial Statement Audits for For-Profit Universities.
Our Audit process takes approximately 3–4 weeks and results in:
- The Auditors’ Report or letter of Opinion on your Financial Statements’ compliance with Generally Accepted Accounting Principles (GAAP)
- The Auditors’ letter on financial reporting internal controls, and on Compliance (GAO Audits)
- The Auditors’ Report on Compliance with Major Programs and Internal Controls over Compliance Required by the Uniform Guidance. (Single Audit)
For Profit University
Financial Statement Audits
Title IV Compliance
Our team specializes in providing comprehensive compliance audits and services for educational institutions participating in the Federal Student Aid (FSA) programs. Our expert knowledge of the constantly evolving regulations and rules pertaining to Title IV laws enables us to offer tailored consultative guidance to ensure your organization is always in compliance. Our services enable you to focus on providing exceptional educational opportunities for your students.
For–profit universities must comply with Title IV of the Higher Education Act of 1965 as amended, which is the federal law governing the administration of federal student aid programs. To remain compliant, for–profit universities must meet the standards of the Program Participation Agreements (PPAs) established by the Department of Education, have appropriate administrative and financial systems in place to ensure the accurate administration of federal student aid funds, and maintain a satisfactory academic records.
What regulations do nonprofits who are receiving Federal and State Funding have to meet?
Nonprofits that receive federal and state funding are required to adhere to the regulations and guidelines set forth by the funding source. Depending on the type of funding source, nonprofits may need to meet certain requirements such as financial transparency, program management, and reporting. Additionally, nonprofits may need to meet certain eligibility criteria and comply with any applicable laws or regulations. It is important for nonprofits to ensure that they are operating in compliance with all applicable regulations in order to receive and maintain their funding.
Nonprofits need annual financial statement audits to ensure that their financial records are accurate and complete. Audits also provide an independent opinion on the fairness of financial statements, and they can help to identify any potential financial fraud or mismanagement. Audits are also essential for demonstrating to funders and other stakeholders that the organization is responsibly managing its finances.
What types of reports do nonprofits need to have ready for an annual audit?
Nonprofits typically need three types of reports to submit to an auditor to create their annual financial statement audits: a balance sheet, an income statement, and a statement of cash flows. The balance sheet shows the nonprofit’s assets and liabilities at a specific point in time. The income statement provides a summary of the organization’s revenues and expenses over a specific period of time. The statement of cash flows shows how much cash the organization has generated or used during the same period.
Nonprofit Institutions
Annual Financial Statement Audits
For Profit Businesses
Loan Covenant Compliance Audits
What is a loan covenant audit?
A loan covenant audit is an assessment of a borrower‘s compliance with the terms of their loan agreement. This assessment is conducted by an independent auditor and usually includes an analysis of the borrower‘s financial statements, including balance sheet and cash flow statements, as well as other documentation related to the loan. The audit is intended to ensure that the borrower is in compliance with the covenants agreed upon in the loan agreement, such as repayment terms, loan balance limits, and other requirements.
What size or type of loan would require an annual financial statement audit to be submitted to a business bank?
Generally, any loan that is greater than $1 million or is a loan used for major business acquisitions or mergers may require an annual financial statement audit. Larger loans may also require more stringent requirements, such as multiple audits per year or a more thorough review of the loan documents. Additionally, some banks may require an audit of any loan they provide, regardless of size.
Types of Financial Statement Audits
What is GAAS (Generally Accepted Auditing Standards)?
Generally accepted auditing standards (GAAS) are a set of systematic guidelines used by auditors when conducting audits of companies’ financial records. GAAS helps to ensure the accuracy, consistency, and verifiability of auditors’ actions and reports. The Auditing Standards Board (ASB) of the American Institute of Certified Public Accountants (AICPA) created GAAS. Its members agree to adhere to the standards.
What are GAGAS (Generally Accepted Government Auditing Standards)?
Generally Accepted Government Auditing Standards (GAGAS) are a set of professional standards that provide guidance for government auditors. These standards, which are also referred to as the “Yellow Book”, are issued by the Government Accountability Office (GAO). GAGAS are designed to ensure that audits of governmental activities, programs, and functions are conducted in a professional and unbiased manner. The standards provide guidance on the types of auditing procedures that should be used and how to document audit evidence. The standards also provide recommendations on how to report audit findings and the level of assurance that should be provided.
What is a Single Audit?
The Single Audit, Subpart F of the OMB Uniform Guidance, is a rigorous, organization-wide audit or examination of an entity that expends $750,000 or more of federal assistance (commonly known as federal funds, federal grants, or federal awards) received for its operations. Usually performed annually, the Single Audit’s objective is to provide assurance to the US federal government as to the management and use of such funds by recipients such as states, cities, universities, non-profit organizations, and Indian Tribes. The audit is typically performed by an independent certified public accountant (CPA) and encompasses both financial and compliance components. The Single Audits must be submitted to the Federal Audit Clearinghouse along with a data collection form, Form SF-SAC.