Independence Support Services for Audit Firms and Valuation Professionals
Many firms that provide audit and attestation services, along with business valuation professionals have to address independence issues under ET 1.295 when addressing non-attest services provided to a client. The AICPA Code of Professional Conduct updated through December 31, 2017 contains prescriptions for work-file documentation specifically addressing the rendering of non-attest services and threats to independence or other conflicts of interest. Regulators have been increasing scrutiny and employing greater level of skepticism in PCAOB inspections, peer review, and other monitoring programs concerning the impact a firm’s multiple non-attest services has on objectivity and independence.
As skilled colleagues recognizing these risks, it is common-sense that such conflicts and dilemmas can be alleviated by having a specialist not part of the audit firm hired by the client to fill gaps in management’s skills and expertise concerning critical needs for audit communications and documenting support for financial statement assertions. This is particularly true with business clients in the upper tier of a small size client through the lower tier of a medium size client where management resources for in-house specializations is limited, or the need is short-term.
The product we have developed and continue to enhance is Just-in-Time Independence Support. In our experience, the need for additional specialist services is often discovered in the middle of the audit, and there is a clear line that indicates that having audit firm employees fill the gap would result in the audit firm attesting to their own information, thus blurring the line of responsibility between management and the auditor. Our JTIS service provides short-term highly qualified personnel that the client hires to perform the non-attest service, and minimize interruptions of the audit workflow. These assignments include:
- Preparation of financial statements and drafting of footnote disclosures
- Preparation of prospective financial information and cash flow projections for valuation analysis
- Assist management with its internal documentation of fair value measurements and impairment testing
- Assistance with preparation of calculations required by specific Accounting Standards Code
- Assistance with implementation of new accounting standards such as ASC 606. And ASC 842
- Development of non-GAAP supplemental financial information
The primary goal of making outsourced on-demand non-attest services available is to improve audit quality with efficient, timely, sophisticated, and cost effective resources.
We have solutions to meet your challenges:
- Non-attest services for all facets of financial statement preparation and prospective financial information
- Assisting management with implementation of new accounting standards
- Drafting GAAP compliant footnote disclosures and tables
- Business valuation and fair value measurement