Financial Statement Audit

Accurate financial information even more important in challenging times

In the construction industry it is important to keep an eye on your company’s cash flow as well as the cash flow on your major projects. “Cash is king,” they say and in this economy, cash has gained even more importance, especially in the construction industry.

With this in mind, you can depend on Plante Moran’s auditing services to provide you with cash flow information that will help you have a clear understanding of your company’s financial position as well as cash flow on your major projects. And you can use their financial statement audits to test the accuracy of your estimates. Accurate bidding is so important when your competitors are willing to accept thinner and thinner margins.

Experienced with percentage of completion accounting

You will appreciate the experience of our auditors with companies using the percentage of completion method of accounting for long-term contracts and their streamlined, risk-based approach to determining which contracts to audit. You will find that our accountants audit fewer contracts, but are able to single out the ones that need the most attention.

You can depend on our audit and accounting team to confirm and verify the terms and conditions of contracts. They will look at the original contract price, total approved change orders, total billings and payments, retentions, details of claims, back charges or disputes, and the estimate of percentage complete. Our auditors are skilled at identifying issues that can assist our clients with the effective management of their contract administration processes.

Contract change orders can make or break a project

Management of construction contract change orders can have a huge impact on the success of a project and the overall company. These change orders are of particular interest to our auditors. The impact on the estimated revenue and cost can be significant. To help us assess the status of projects and the related change orders our auditors will even visit construction sites to interview the project managers and other personnel to gain a better understanding of your company’s role in completing the project.

Why is it so important to audit the contracts and the related change orders? They represent the main elements of the construction company’s financial statement. How the current expenses on a contract compare to the estimated costs will drive revenue recognition.

Putting data to work

You can depend on the information provided by our auditors to help you analyze your company’s ability to estimate. Our auditors can give you an idea of how well you forecast labor, equipment, material costs, and contingencies.. Accurate data from the Plante Moran audit team will give you a firm foundation to move forward. Our auditors and accountants will invest their skills in your success.