Wagoner and Deutsch Provide Guidance on Financial Audits

Photograph: Dusty Wagoner (left) and Matt Deutsch speaking to Washburn Law students.On Wednesday, November 13, 2019, the Business and Transactional Law Center (BTLC) continued its Financial Literacy for Lawyers series by hosting Dusty Wagoner (left in photo) and Matt Deutsch.

Dusty Wagoner and Matt Deutsch both graduated from Washburn University and are Certified Public Accountants. They work at Berberich Trahan & Co., P.A., a certified public accounting firm, and have extensive experience assisting businesses to evaluate, understand, and strategically plan for financial success.

The presentation focused on financial audits – the purpose of audits, the different types, and the scope and outcome of each. An audit is performed as an independent review of financial documents and procedures. A financial statement audit involves a review of internal controls and actual business procedures and provides the highest level of assurance. A financial statement review provides limited assurance and consists primarily of analytic procedures and inquiries of management. An agreed-upon procedures engagement is limited to the review of a specific procedure.

An audit will be evaluated based on a level of materiality – a certain level of significance in terms of a dollar value. Even the most thorough review, a financial statement audit, will not catch every accounting error, rather the purpose is to identify significant discrepancies and to ensure that the entity is following Generally Accepted Accounting Principles (GAAP). Wagoner and Deutsch pointed out that, for some businesses, a discrepancy as much as $200,000 many not be considered "material."

Wagoner and Deutsch also elaborated on GAAP and pointed out that Kansas allows municipalities, school boards, and some other organizations to use a regulatory basis rather than GAAP. This is less work from an accounting perspective but also has drawbacks.

Washburn Law is grateful to Dusty Wagoner and Matt Deutsch for taking the time out of their busy schedules to share their experience and insight with students.