 |
 |
 |
 |
 |
 |
 |
  |
Case Study: Litigation support – what type of accounting service?
For over 60 years Buchbinder Tunick & Company LLP has developed an effective working relationship with the legal community by rendering a variety of traditional as well as nontraditional financial services.
There are three types of traditional services relating to financial statements. The most extensive is an audit. Often misunderstood as similar to the procedures conducted by the IRS, a financial statement audit involves an examination, on a test basis, of the client’s accounting records in order to opine on whether the statements are free of material misstatement as it relates to accounting principles generally accepted in the United State of America (“GAAP”). The audit is not conducted to find fraud, however, if fraud is discovered, the auditor will bring it to the attention of the client’s management.
One level below an audit is a review. For a review, the accountant performs various analytical procedures as well as inquires of management to obtain limited assurance that there are no material modifications that should be made to the financial statement in order for it to comply with GAAP.
A compilation is designed to assist management in presenting financial information in the form of financial statements. The CPA does not provide any assurances that there are no material modifications that should be made to the statements.
Beyond these traditional services, the CPA can perform agreed upon procedures and litigation support. Agreed-upon procedures are used to report on specific financial data such as compliance with certain laws, regulations or terms of contracts. Litigation support can include the following:
- Assistance with civil or criminal investigations of fraud,
- The determination of lost profits,
- The value of a closely-held business as it involves marital and shareholder disputes, and
- Assistance in bankruptcy proceedings, and
- Investigation of electronic records and forensic computing.
For these types of engagements, the CPA may be retained directly by the client or work through an attorney; however, if the client engages the CPA, the information exchanged is not protected by attorney-client privilege. For this reason, the client’s attorney often engages the CPA on the client’s behalf.
|
|
|---|