Audit & Assurance Services

An audit provides the highest level of assurance that financial statements are free from material misstatement. We express an opinion on whether the statements present fairly, in all material respects, in accordance with GAAP (or other applicable framework). Our Audit Approach: We follow a risk-based methodology aligned with Generally Accepted Auditing Standards (GAAS) and AICPA professional standards: 1. Planning & Risk Assessment • Understand the entity and its environment • Identify and assess risks of material misstatement • Design audit procedures responsive to assessed risks • Establish materiality thresholds 2. Internal Control Evaluation • Understand controls relevant to the audit • Evaluate design and implementation • Test operating effectiveness when relying on controls • Identify control deficiencies and significant deficiencies 3. Substantive Procedures • Test account balances and transactions • Analytical procedures for reasonableness • Confirmation of external balances • Physical observation and inspection 4. Reporting • Express opinion on financial statements • Communicate significant matters to governance • Report on internal control deficiencies Audit reports provide reasonable (not absolute) assurance—the highest level attestation services can provide.

A review provides limited assurance that no material modifications are needed to financial statements for them to conform with GAAP. Reviews are less extensive than audits but provide meaningful assurance for many stakeholders. Review Procedures: Reviews primarily consist of: • Inquiries of management about accounting practices, significant transactions, and unusual events • Analytical procedures comparing financial data to expectations • Reading financial statements for obvious errors or departures from GAAP • Obtaining management representations Unlike audits, reviews do not require: • Testing of internal controls • Substantive testing of balances • External confirmations • Physical observation of assets Review Reports: We express limited assurance in the negative form: "Based on our review, we are not aware of any material modifications that should be made to the financial statements." When Reviews Are Appropriate: • Bank covenants requiring reviewed financials • Investor due diligence • Seller financing arrangements • Nonprofit grant requirements • Franchise disclosure requirements

A compilation is a non-assurance service where we assist management in presenting financial information without providing any assurance on the statements. Compilations are the most economical option when formal CPA involvement is required but stakeholders don't need assurance. Compilation Services: • Prepare financial statements from client-provided information • Ensure proper format and GAAP classification • Identify obvious errors or departures from GAAP • Apply professional expertise to presentation No Assurance Provided: Our compilation report clearly states: "We have not audited or reviewed the financial statements... and, accordingly, do not express an opinion, a conclusion, nor provide any form of assurance on them." Compilation Options: • Full disclosure compilations — Complete GAAP financial statements • Compilations omitting disclosures — When disclosures are not required by stakeholders • Special purpose framework — Tax basis, cash basis, or regulatory basis • Management use only — Internal statements without report distribution When to Use Compilations: • Internal management reporting • Bank requests requiring CPA-prepared statements • Cost-effective annual financial statement preparation • Preliminary financial statements before formal engagement

Agreed-Upon Procedures engagements allow users to customize the procedures we perform to address specific concerns. Rather than expressing an opinion, we report factual findings. How AUP Works: 1. Users identify specific procedures needed 2. We perform only those procedures 3. We report findings without conclusions 4. Users determine sufficiency for their purposes Common AUP Applications: • Royalty audits — Verify royalty payments under licensing agreements • Due diligence support — Specific procedures on acquisition targets • Covenant compliance — Test specific loan covenant calculations • Grant compliance — Verify expenditure compliance with grant terms • Investment verification — Confirm existence of fund assets • Revenue sharing — Verify calculations under revenue-sharing agreements • Internal control testing — Specific control tests for management AUP Benefits: • Tailored to specific needs • Cost-effective focused engagement • Faster turnaround than full audit • Addresses specific stakeholder concerns Restricted Use: AUP reports are generally restricted to parties who agreed to the procedures, as only those parties understand the context and scope.

Different industries face unique accounting and auditing challenges. Our team includes specialists with deep knowledge of industry-specific requirements: Employee Benefit Plans: • 401(k), 403(b), and defined benefit plan audits • DOL filing requirements (Form 5500) • Prohibited transaction identification • Investment valuation and existence testing Nonprofit Organizations: • Form 990 compliance • Uniform Guidance (2 CFR 200) audits for federal grants • Functional expense allocation • Net asset classification Construction & Real Estate: • Percentage-of-completion accounting • Contract revenue recognition • Project cost accumulation • Surety and bonding requirements Professional Services: • Work-in-progress valuation • Revenue recognition under ASC 606 • Partner compensation arrangements • Client trust account verification Manufacturing & Distribution: • Inventory valuation methods • Standard cost variance analysis • Intercompany transaction elimination • Multi-location procedures

Businesses are built on operations — not audit binders. When auditors arrive with PBC lists, assertions, and requests for source docs, AJEs, related-party support, reconciliations, and rollforwards, disorganization turns into billable hours and higher fees. The Problem: Every hour your external auditors spend hunting for documents is billed directly to you — typically at $200–$500/hr. Disorganization commonly adds 30–50% to audit invoices, and the disruption pulls your management team away from running the business. ebotCPA's Co-Pilot Auditor: We step in as your internal audit-prep partner, handling the heavy lifting before fieldwork begins: • PBC List Management — Track every open item, assign internal owners, deliver to auditors on Day 1 • Source Document Organization — Retrieve, index, and package invoices, contracts, and bank records • AJEs & Reconciliations — Prepare adjusting entries and account reconciliations with full support • Rollforward Schedules — Fixed assets, debt, equity, and other key balance rollforwards • Related-Party Documentation — Assemble complete support for all related-party transactions • Auditor-Facing Coordination — Serve as primary contact during fieldwork, keeping your team focused The Result: Faster fieldwork, lower audit fees, fewer findings, and a management team that stays focused on operations — not audit requests.

As a firm committed to the highest professional standards, we maintain rigorous quality control and independence policies: Quality Control System: Our quality control policies address: • Leadership responsibility for quality • Relevant ethical requirements including independence • Acceptance and continuance of client relationships • Human resources — hiring, training, advancement • Engagement performance — supervision and review • Monitoring — ongoing quality assessment Independence Standards: We maintain independence in both fact and appearance: • No financial interests in audit clients • No prohibited non-audit services during audit period • Rotation of engagement personnel for extended relationships • Clear policies on fee arrangements • Documentation of independence conclusions Peer Review: Our firm undergoes triennial peer review by the AICPA, with results available upon request. This external quality assessment ensures we meet professional standards. Professional Liability Insurance: We maintain comprehensive professional liability coverage appropriate for our practice, protecting both our clients and our firm.