AUDITING SERVICES

The professional services we render are tailored specifically to our client’s financial and accounting affairs. All of our work is approached with the objective of providing practical business solutions to our client’s needs. Our firm has earned a solid reputation for doing quality work and has maintained standards of client service which are second to none.

We will arrange an audit planning conference with the appropriate personnel of the organization. The purpose of the conference is to obtain important documents, update essential information and discuss any special problems. We will prepare a timetable for audit work in general, incorporating the dates when certain actions or procedures are expected to be undertaken and taking into account target dates for submission of reports. We will also meet specifically with the accounting personnel regarding the audit to discuss preparatory arrangements.

Our objective, as a prerequisite for the planning and conduct of the audit examinations, are:

* To identify questionable risk areas.
* To gain an understanding of the internal control environment and thus facilitate the review of internal accounting control.
* To utilize a knowledge of the business transactions and arrangements, as a basis for understanding and evaluating procedures.
* To assess the accounting systems, conditions, and controls under production and recording or accounting data.
* To better understand the organization’s accounting policies and practices when making necessary audit judgements as in evaluating the reasonableness of estimates such as for doubtful accounts and contingencies.
* To permit a more informed judgment as to the reasonableness of the organization’s explanations and representations and their consistency with the realities of the organizations and its economic environment.

We have developed a practical approach to the evaluation of internal operating and accounting controls which provides for defining what the system is supposed to do before trying to determine how well it is doing it. This is a three step approach:

1. Identify the principal activities in each function of the organization.

2. Identify the system deficiencies.

3. Evaluate whether the identified system attributes and procedures provide capabilities for program and fiscal reporting.

We have provided a framework for completing the first steps by dividing organizations into three basic operating functions.

General Administration (controls and support of functional activities)
- Plan of organization                                                                                 
- Policies and procedures
- Information systems
- Budgets
- Responsibility center and cost accounting system.                                     
- Operating Analyses
- Financial Reporting                                                                                 
- Regulatory Reporting
- Security and physical safeguards                                                             
- Salaries and Wages
- Hiring and Termination
- Wage and Salary administration
- Fringe benefits                                                                                       
- Payroll preparation
- Recording                                                                                               
- Furniture and equipment
- Reconciliation of detail records to control accounts and physical assets to accounting records.

Adminstrative of Program Services (control and support of functional activities)
- Policies and procedures
- Contract Compliance
- Information systems
- Budgets
- Operating analysis
- Financial Program Reporting
- Monitoring Responsibilities

Operation (processing and control of transactions)
- Cash receipts                                                                                           
–Security and physical safeguards
- Disbursements                                                                                         
- Authorizations
- Recording
- Transaction processing
- Authorization
- Recording

We have prepared a study guide that provides typical study procedures necessary to evaluate the adequacy of the existing systems of organizations and to prepare a review program tailored to the particular area under study. Our guide facilitate efficient review performance by organizing our efforts to determine:

* What operations are performed by the area being reviewed?

* What are the deficiencies in the operation?

* What procedures should be followed to provide adequate monthly reporting of program and fiscal activities?

Our approach to the review of the system consists of the following:

- Preparation of flow charts and other descriptions that document the functions of the area under review.

- We will analyze the flow charts and other descriptions to determine the area’s functions.

- Activity supporting functions

- Resulting financial transactions

OUR APPROACH TO EVALUATION OF DATA

Our evaluation of DATA serves to:

1. Assess the ability of the existing system to provide accurate program and fiscal reports.

2. Identify the adverse factors of the existing system that may result in inaccurate program and fiscal reports.

3. Guide our firm in the preparation of a management report that describes procedures for improvements.

REPORTING OUR FI NDINGS

Our report to management will be specific. Our comments will be structured as follows:

* What should be and why

* What we found

OUR RECOMMENDATION

All recommendations will be specifically worded and will require some one to perform some ac tion.