Shareholders, creditors, banks and private investors often need assurance that the financial statements accurately represent the true financial position of a company.
Your shareholders, creditors, banks or private investors have different levels of risk tolerance, so we provide three levels of assurance to meet your needs.
Audit – Highest Level of Assurance
An audit provides the highest level of assurance. An audit is a methodical review and objective examination of the financial statements, including the verification of specific information as determined by the auditor or as established by general practice.
Our work includes a review of internal controls, testing of selected transactions, and communication with third parties. Based on our findings, we issue a report on whether the financial statements are fairly stated and free of material misstatements.
You get the highest level of assurance because we go outside your company to obtain more information. Typically, we'll have written communication with:
Less extensive than an audit but more involved than a compilation, a review engagement consists primarily of analytical procedures we apply to the financial statements and various inquiries we make of your company's management team.
If the financial statements or supporting information appear inconsistent or otherwise questionable, we may need to perform additional procedures.
A review doesn't require us to study and evaluate your company's internal controls or verify data with third parties or physically inspect assets. Rather, a review report expresses limited assurance in the form of the statement: "nothing has come to my attention that causes me to believe that these financial statements are not, in all material respects, in accordance with Canadian accounting standards for private enterprises” for the financial statements to be in conformity with the Canadian Generally Accepted Standards for Review Engagements. Reviewed financial statements will also include all required notes and other disclosures.
Why might a business request a review engagement? It can be a good middle ground, providing the advantages of a CPA's technical expertise without the work and expense of an audit.
Compilation (Notice to Reader) – Lowest Level of Assurance
In compiling financial statements for a client, we present information that is the "representation of management" and expresses no opinion or assurance on the statements. Compilations (Notice to Readers) don't require inquiries of management or analytical procedures. Instead, we rely on our knowledge of accounting principles and a general understanding of your business.
Banks often require compilations from an independent CPA as part of their lending covenants.
Which Report Should You Use?
Each type of financial statement report may suit specific circumstances, depending on requirements from your client's bank or other parties, as well as meet budgetary needs.
Understanding each report's unique strengths and weaknesses can help you choose the most appropriate one.
In the process of providing the above services, we will assist your business by identifying tax planning opportunities.
Our team can also help pinpoint your business’ strengths and provide service that goes beyond your expectations.
Whether the engagement is a Compilation (Notice to Reader), Review or Audit, our Licensed Public Accounting team can meet the financial reporting needs of your business.