The construction industry is more than construction workers and project managers. If you want your business to succeed and grow, you need good construction CPAs in your corner. When you’re looking for a surety bond, it’s important to work with a CPA firm that understands the construction industry and the details of audited financial statements.
Let’s look at why construction companies need CPA auditors, how they can help construction companies secure bonds, and why financial statement audits are essential to this process.
Construction CPAs and Audited Financial Statements
Internal staff does their best to prepare and keep tabs on spending. While these processes work, they don’t always follow GAAP, which can present issues when it comes time to secure a bond or a loan for a project.
When a construction company works with construction CPAs, the accounting team prepares an audited financial statement and ensures the audit follows GAAP and regulations. Construction audits are essential for two reasons: securing loans and securing a bond.
Why are audited financial statements necessary to lenders?
Before lending money, a bank must know a construction company is financially responsible. The audited financials help prove the flow of income.
The Miller Act also requires a financial statement audit. This Act requires construction companies that bid on government projects (and some private projects) to have bond surety before being considered for a project.
Plus, some banks only grant a loan if the construction company has an audited financial statement. Ultimately, not having a construction audit of the financials could prevent a company from obtaining work opportunities or being excluded from loans.
What is Required for an Audited Financial Statement?
With a good working partnership between a construction accounting team and the internal business staff, audited financial statements are easy to prepare. Before a construction company calls a CPA to schedule an audit, they should work to gather the information the CPA will need to complete an audit. Some required documents include:
- The balance sheet
- The income statement
- The statement of cash flows
- The statement of shareholders’ equity
- Any explanatory financial notes
- The in-house financial statements
- The schedule of completed jobs and contracts in progress
A CPA must also know about any planned projects a construction company already has on the calendar. This information will help a construction CPA firm determine future costs and how they will affect a company’s financials. This information and the suggested documents will help Construction CPAs complete an accurate and thorough audit.
Construction CPAs at Assurance Dimensions
Construction accounting is highly technical and often requires experienced construction CPAs to ensure the job is done correctly. At Assurance Dimensions, we have a skilled team of construction accounting professionals ready to serve commercial and residential construction companies.
We offer secure remote auditing procedures for faster service. With our accounting professionals by your side, you’ll receive the “big firm” accounting excellence tailored to your needs. Contact us today to learn more about our auditor services.