About

Accounting & Auditing

Small and Privately Held Business Audits, Reviews, and Compilations

Stockholders, creditors, and private investors often need assurance that the financial statements accurately represent the true financial position of a company. Each has a different levels of risk tolerance, so we provide three levels of assurance to meet those requirements.

Audit - Highest Level of Assurance

An audit provides the highest level of assurance as a methodical review and objective examination of the financial statements, including the verification of specific information as determined by the auditor or as established by general practice.

Our work on an audit includes a review of internal controls, testing of selected transactions, and communication with third parties. Based on our findings, we issue a report confirming that the financial statements are fairly stated and free of material misstatements.

An Audit Allows You To:

  • Satisfy stakeholders such as employees, customers, suppliers and pressure groups, as well as the investing community, as to the credibility of published information.
  • Facilitate the payment of corporate tax, goods and services tax, and other taxes on-time and accurately to avoid interest, penalties, and investigations.
  • Comply with banking covenants.
  • Help deter and detect material fraud and error.
  • Facilitate the purchase and sale of businesses.

It entails:

The highest level of assurance because we research beyond your company to obtain comprehensive data. Typically, we generate written communication with:

  • Your customers--to check outstanding receivable balances
  • Your banks-- to confirm cash or debt balances and terms
  • Your vendors -- to verify outstanding payable balances
  • Your attorneys-- or information on pending or threatened legal action

We also perform physical inspections by observing your inventory counting methods and perform test counts. We document and test each operating cycle, including sales and cash receipts, expenses and cash disbursements, and payroll. Our audit papers include a detailed work program to document the examinations and testing performed, as well as your supporting work papers.

When an Audit is Required

All public companies are required to have an annual audit, but some nonpublic entities must undergo an annual audit as well. These include local governments, not-for-profit agencies, and other organizations receiving government grants.

Some financial institutions require audits of nonpublic companies based on the financing amount and/or the bank's assessment of the company's risk. Also, companies with absentee ownership (such as those owned by investment firms, or individuals who no longer run the business) may order audits as checks of their management teams.

Review - Limited Assurance

Less extensive than an audit, but more involved than a compilation, a review engagement consists primarily of analytical procedures we apply to the financial statements, and various inquiries we make of your company's management team. If the financial statements or supporting information appear inconsistent or otherwise questionable, we may need to perform additional procedures.

A review doesn't require us to study and evaluate your company's internal controls, verify data with third parties or physically inspect assets. A review report expresses limited assurance in the form of the statement: "We are not aware of any material modifications" for the financial statements to be in conformity with the Generally Accepted Accounting Principles (GAAP). Reviewed financial statements must include all required footnotes and other disclosures.

When a Review Makes Sense

A review is a good middle ground approach for those seeking assurance, providing the advantages of a CPA's technical expertise without the work and expense of an audit.

Compilation - Lowest Level of Assurance

In compiling financial statements for a client, we present information that is the "representation of management" and expresses no opinion or assurance on the statements. Compilations don't require inquiries of management or analytical procedures. Instead, we rely on our knowledge of accounting principles and a general understanding of your business.

When a Compilation is Recommended

Banks often require compilations from an independent CPA as part of their lending covenants.

Which Report Should You Use?

Each type of financial statement report may suit specific circumstances, depending on requirements from your bank or other parties, and the amount you wish to spend on the service.

Top of Form

We are happy to help you decide which level of assurance best meets your specific needs. Please call us or fill out the form below for a Free Consultation. Bottom of Form

Employee Benefit Plan Audits

Sharrard, McGee & Co, PA is pleased to be the professional accounting firm that many companies trust to audit their employee benefit plans. Their confidence in our highly specialized ERISA experience and knowledge of the changing rules and regulations of the Department of Labor (DOL), Internal Revenue Service and other state and federal regulators is well-placed.

A study by the DOL revealed that nearly 40% of the audits of employee retirement plans are done incorrectly with serious consequences that may jeopardize plan assets and result in civil penalties to the plan administrator. They suggested that plan administrators evaluate the firm conducting these audits based on five quality factors. These include:

  1. The number of employee benefit plans the CPA audits and the types of plans audited:

Sharrard, McGee & Co., PA completed 33 audits of employee benefit plans for the 2017 calendar year. We audited a wide variety of plans including defined contribution, defined benefit, ESOP and health and welfare plans. We performed both limited scope audits and full scope audits for these clients.

  1. The extent of specific annual training the CPA received in auditing plans:

Sharrard, McGee & Co, PA understands that employee benefit plans are unique and have special requirements for auditing. Therefore, we currently have 9 staff members that specialize in ERISA audit work and all team members attain at least 8 hours of certified professional education specifically relating to employee benefit plan audits each year. One of our team members attends the annual American Institute of Certified Public Accountants (AICPA) conference on employee benefit plans and is the Chair of the NCACPA Employee Benefit Plan Committee.

  1. The status of the CPA's license with the applicable state board of accountancy:

Sharrard, McGee & Co, PA is licensed in North Carolina and is in good standing with our state board.

  1. Whether the CPA has been the subject of any prior DOL findings or referrals or has been referred to a state board of accountancy or the AICPA for investigation.

Sharrard, McGee & Co., PA is proud to say that we have not been the subject of any DOL findings and have not been referred to a state board of accountancy or the AICPA.

  1. Whether or not the CPA's employee benefit plan audit work has recently been reviewed by another CPA in the Peer Review process and, if so, whether such review resulted in negative finding:

 Sharrard, McGee & Co, PA had our last peer review as required – every other year. We received a clean opinion with no findings.

In addition to the items indicated by the DOL, we are also a member of the AICPA Employee Benefit Plan Audit Quality Center (EBPAQC). We have been a member since the center formed in 2004. Center members agree to be held to higher standards than other professionals, including: 

  • Designate an audit partner to have firm-wide responsibility for the quality of the firm's employee benefit plan practice:

Director Connie Laster has been designated as this partner at Sharrard, McGee & Co, PA.

  • Establish a program to ensure that all employee benefit plan audit engagement personnel possess current knowledge, appropriate to their level of involvement in the engagement and complete at least 8 hours of employee benefit plan specific CPE every 3 years:

That is the minimal amount of training required by our team.

  • A partner must participate in an annual Center-sponsored Designated Partner planning webinar on recent developments in employee benefit plan auditing each year:

Director Connie Laster and many of our managers participate in the webinars.

.

  • Establish and document policies and procedures specific to the firm's employee benefit plan audit practice:

We have these policies and procedures in place.

  • Establish an annual internal inspection of the employee benefit plan audits:

These inspections are performed every year by directors or managers on the employee benefit plan audit team. The inspector must be someone that was not involved in the audit team for the client chosen for inspection.

  • Make publicly available information about the most recent peer review:

This information is easily accessible.

  • Include an employee benefit plan audit in the firm's peer review:

We included an employee benefit plan audit in the most recent peer review.

  • File all necessary documents with the Center as needed:

 We have complied each year with the EBPAQC documentation requests.

Sharrard, McGee & Co, PA is committed to providing quality audits to all of clients, and our proud of our impressive track record in providing employee benefit plan audits to a growing number of business clients. Please call us to discuss your next audit.

eligible participation graph

Not-for-Profit Audits

Sharrard, McGee & Co, PA has extensive experience working with not-for-profit organizations across the Triad for over four decades. We understand the unique dynamics in which dedicated individuals and entities contribute to helping a non-profit grow, serve its community and constituents, and focus on its purpose. We work in partnership with executive directors and their boards to support these objectives by providing valuable advice and hands-on financial management services. Each of our Directors have served in leadership positions on boards of community agencies and organizations in our community for many years and has an insider’s understanding of the day-to-day operations of a thriving not-for-profit.

Our specialized expertise includes:

Setting Goals and Objectives

Our experience indicates that the most successful not-for-profit organizations are those that set goals and establish long-range plans. We can help develop financial strategies for achieving your objectives.

Budgeting and Financial Reporting

Once your objectives and goals are established, we will help with budget preparation to help achieve them, monitor activities, and highlight deviations from planned operations.

Financial reports are extremely important for not-for-profit organizations as they often determine the amount of funding you will obtain. Since funding agencies receive many grant applications each year, a well-prepared financial statement will enhance your ability to receive funds and often provides an advantage over those organizations that have not made this step a priority. We will ensure that your financial statements are comprehensive and accurate, optimizing your opportunity to be selected as the recipient of funding.

Evaluating Internal Controls

We can also help prepare your income tax returns, providing audit, review, and compilation services for your financial statement as appropriate.

Assisting Your Board

Your Board of Directors and staff must work together in collaboration and cooperation to achieve your organization's goals. As an expert third-party consultant, we can present financial information, interpret data, and help evaluable performance in an objective and helpful manner.

We provide audit, assurance, tax, and advisory services to not for profit organizations of all sizes including:

  • 501(c)(3) Charitable, Educational and Literary Organizations
  • 501(c)(4), Local Associations/Social Welfare Organizations
  • 501(c) 6, Business Leagues and Chambers of Commerce
  • Public and Private Foundations

We perform financial statement audits under:

  • US Generally Accepted Auditing Standards (GAAS)
  • Government Auditing Standards (GAGAS or “Yellow Book”)
  • Single Audits of federal awards under the Uniform Guidance

Other services include:

  • Financial statement reviews and compilations
  • Grant specific audits
  • QuickBooks selection and training
  • Tax return preparation – Forms 990-N, 990 EZ, 990, 990-T and 990-PF
  • Guidance on
    • Unrelated business income tax issues
    • Budgeting
    • Internal controls
    • Board governance matters
    • Tax compliance
    • Representation before tax authorities
    • State charitable solicitation licensing

The accounting professionals at Sharrard, McGee & Co., PA can help your Not for Profit grow your organization, meet your goals, and plan for a successful future.

Accounting & Auditing

Small and Privately Held Business Audits, Reviews, and Compilations

Stockholders, creditors, and private investors often need assurance that the financial statements accurately represent the true financial position of a company. Each has a different levels of risk tolerance, so we provide three levels of assurance to meet those requirements.

Audit - Highest Level of Assurance

An audit provides the highest level of assurance as a methodical review and objective examination of the financial statements, including the verification of specific information as determined by the auditor or as established by general practice.

Our work on an audit includes a review of internal controls, testing of selected transactions, and communication with third parties. Based on our findings, we issue a report confirming that the financial statements are fairly stated and free of material misstatements.

An Audit Allows You To:

  • Satisfy stakeholders such as employees, customers, suppliers and pressure groups, as well as the investing community, as to the credibility of published information.
  • Facilitate the payment of corporate tax, goods and services tax, and other taxes on-time and accurately to avoid interest, penalties, and investigations.
  • Comply with banking covenants.
  • Help deter and detect material fraud and error.
  • Facilitate the purchase and sale of businesses.

It entails:

The highest level of assurance because we research beyond your company to obtain comprehensive data. Typically, we generate written communication with:

  • Your customers--to check outstanding receivable balances
  • Your banks-- to confirm cash or debt balances and terms
  • Your vendors -- to verify outstanding payable balances
  • Your attorneys-- or information on pending or threatened legal action

We also perform physical inspections by observing your inventory counting methods and perform test counts. We document and test each operating cycle, including sales and cash receipts, expenses and cash disbursements, and payroll. Our audit papers include a detailed work program to document the examinations and testing performed, as well as your supporting work papers.

When an Audit is Required

All public companies are required to have an annual audit, but some nonpublic entities must undergo an annual audit as well. These include local governments, not-for-profit agencies, and other organizations receiving government grants.

Some financial institutions require audits of nonpublic companies based on the financing amount and/or the bank's assessment of the company's risk. Also, companies with absentee ownership (such as those owned by investment firms, or individuals who no longer run the business) may order audits as checks of their management teams.

Review - Limited Assurance

Less extensive than an audit, but more involved than a compilation, a review engagement consists primarily of analytical procedures we apply to the financial statements, and various inquiries we make of your company's management team. If the financial statements or supporting information appear inconsistent or otherwise questionable, we may need to perform additional procedures.

A review doesn't require us to study and evaluate your company's internal controls, verify data with third parties or physically inspect assets. A review report expresses limited assurance in the form of the statement: "We are not aware of any material modifications" for the financial statements to be in conformity with the Generally Accepted Accounting Principles (GAAP). Reviewed financial statements must include all required footnotes and other disclosures.

When a Review Makes Sense

A review is a good middle ground approach for those seeking assurance, providing the advantages of a CPA's technical expertise without the work and expense of an audit.

Compilation - Lowest Level of Assurance

In compiling financial statements for a client, we present information that is the "representation of management" and expresses no opinion or assurance on the statements. Compilations don't require inquiries of management or analytical procedures. Instead, we rely on our knowledge of accounting principles and a general understanding of your business.

When a Compilation is Recommended

Banks often require compilations from an independent CPA as part of their lending covenants.

Which Report Should You Use?

Each type of financial statement report may suit specific circumstances, depending on requirements from your bank or other parties, and the amount you wish to spend on the service.

Top of Form

We are happy to help you decide which level of assurance best meets your specific needs. Please call us or fill out the form below for a Free Consultation. Bottom of Form

Employee Benefit Plan Audits

Sharrard, McGee & Co, PA is pleased to be the professional accounting firm that many companies trust to audit their employee benefit plans. Their confidence in our highly specialized ERISA experience and knowledge of the changing rules and regulations of the Department of Labor (DOL), Internal Revenue Service and other state and federal regulators is well-placed.

A study by the DOL revealed that nearly 40% of the audits of employee retirement plans are done incorrectly with serious consequences that may jeopardize plan assets and result in civil penalties to the plan administrator. They suggested that plan administrators evaluate the firm conducting these audits based on five quality factors. These include:

  1. The number of employee benefit plans the CPA audits and the types of plans audited:

Sharrard, McGee & Co., PA completed 33 audits of employee benefit plans for the 2017 calendar year. We audited a wide variety of plans including defined contribution, defined benefit, ESOP and health and welfare plans. We performed both limited scope audits and full scope audits for these clients.

  1. The extent of specific annual training the CPA received in auditing plans:

Sharrard, McGee & Co, PA understands that employee benefit plans are unique and have special requirements for auditing. Therefore, we currently have 9 staff members that specialize in ERISA audit work and all team members attain at least 8 hours of certified professional education specifically relating to employee benefit plan audits each year. One of our team members attends the annual American Institute of Certified Public Accountants (AICPA) conference on employee benefit plans and is the Chair of the NCACPA Employee Benefit Plan Committee.

  1. The status of the CPA's license with the applicable state board of accountancy:

Sharrard, McGee & Co, PA is licensed in North Carolina and is in good standing with our state board.

  1. Whether the CPA has been the subject of any prior DOL findings or referrals or has been referred to a state board of accountancy or the AICPA for investigation.

Sharrard, McGee & Co., PA is proud to say that we have not been the subject of any DOL findings and have not been referred to a state board of accountancy or the AICPA.

  1. Whether or not the CPA's employee benefit plan audit work has recently been reviewed by another CPA in the Peer Review process and, if so, whether such review resulted in negative finding:

 Sharrard, McGee & Co, PA had our last peer review as required – every other year. We received a clean opinion with no findings.

In addition to the items indicated by the DOL, we are also a member of the AICPA Employee Benefit Plan Audit Quality Center (EBPAQC). We have been a member since the center formed in 2004. Center members agree to be held to higher standards than other professionals, including: 

  • Designate an audit partner to have firm-wide responsibility for the quality of the firm's employee benefit plan practice:

Director Connie Laster has been designated as this partner at Sharrard, McGee & Co, PA.

  • Establish a program to ensure that all employee benefit plan audit engagement personnel possess current knowledge, appropriate to their level of involvement in the engagement and complete at least 8 hours of employee benefit plan specific CPE every 3 years:

That is the minimal amount of training required by our team.

  • A partner must participate in an annual Center-sponsored Designated Partner planning webinar on recent developments in employee benefit plan auditing each year:

Director Connie Laster and many of our managers participate in the webinars.

.

  • Establish and document policies and procedures specific to the firm's employee benefit plan audit practice:

We have these policies and procedures in place.

  • Establish an annual internal inspection of the employee benefit plan audits:

These inspections are performed every year by directors or managers on the employee benefit plan audit team. The inspector must be someone that was not involved in the audit team for the client chosen for inspection.

  • Make publicly available information about the most recent peer review:

This information is easily accessible.

  • Include an employee benefit plan audit in the firm's peer review:

We included an employee benefit plan audit in the most recent peer review.

  • File all necessary documents with the Center as needed:

 We have complied each year with the EBPAQC documentation requests.

Sharrard, McGee & Co, PA is committed to providing quality audits to all of clients, and our proud of our impressive track record in providing employee benefit plan audits to a growing number of business clients. Please call us to discuss your next audit.

Not-for-Profit Audits

Sharrard, McGee & Co, PA has extensive experience working with not-for-profit organizations across the Triad for over four decades. We understand the unique dynamics in which dedicated individuals and entities contribute to helping a non-profit grow, serve its community and constituents, and focus on its purpose. We work in partnership with executive directors and their boards to support these objectives by providing valuable advice and hands-on financial management services. Each of our Directors have served in leadership positions on boards of community agencies and organizations in our community for many years and has an insider’s understanding of the day-to-day operations of a thriving not-for-profit.

Our specialized expertise includes:

Setting Goals and Objectives

Our experience indicates that the most successful not-for-profit organizations are those that set goals and establish long-range plans. We can help develop financial strategies for achieving your objectives.

Budgeting and Financial Reporting

Once your objectives and goals are established, we will help with budget preparation to help achieve them, monitor activities, and highlight deviations from planned operations.

Financial reports are extremely important for not-for-profit organizations as they often determine the amount of funding you will obtain. Since funding agencies receive many grant applications each year, a well-prepared financial statement will enhance your ability to receive funds and often provides an advantage over those organizations that have not made this step a priority. We will ensure that your financial statements are comprehensive and accurate, optimizing your opportunity to be selected as the recipient of funding.

Evaluating Internal Controls

We can also help prepare your income tax returns, providing audit, review, and compilation services for your financial statement as appropriate.

Assisting Your Board

Your Board of Directors and staff must work together in collaboration and cooperation to achieve your organization's goals. As an expert third-party consultant, we can present financial information, interpret data, and help evaluable performance in an objective and helpful manner.

We provide audit, assurance, tax, and advisory services to not for profit organizations of all sizes including:

  • 501(c)(3) Charitable, Educational and Literary Organizations
  • 501(c)(4), Local Associations/Social Welfare Organizations
  • 501(c) 6, Business Leagues and Chambers of Commerce
  • Public and Private Foundations

We perform financial statement audits under:

  • US Generally Accepted Auditing Standards (GAAS)
  • Government Auditing Standards (GAGAS or “Yellow Book”)
  • Single Audits of federal awards under the Uniform Guidance

Other services include:

  • Financial statement reviews and compilations
  • Grant specific audits
  • QuickBooks selection and training
  • Tax return preparation – Forms 990-N, 990 EZ, 990, 990-T and 990-PF
  • Guidance on
    • Unrelated business income tax issues
    • Budgeting
    • Internal controls
    • Board governance matters
    • Tax compliance
    • Representation before tax authorities
    • State charitable solicitation licensing

The accounting professionals at Sharrard, McGee & Co., PA can help your Not for Profit grow your organization, meet your goals, and plan for a successful future.

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© Sharrard, McGee & Co, PA 2021,
1321 Long Street, High Point, NC 27262
(336) 884-0410

800 Green Valley Road, Suite 200, Greensboro, NC 27408
(336) 272-9777

E: info@smccpa.com

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