Financial Statement Preparation
Business Accountants in Surrey, BC
There are three main types of financial reporting that a business can require : An audit, a review, or a compilation. All three involve an independent accountant providing an opinion on the fairness of the operations of the business represented in its financial statements.
An audit provides 95% assurance that there are no material misstatements in the statements of the business. (A material misstatement is an error or omission that could cause a reader of the statements to form a different opinion based on those statements. For example an investor wouldn’t invest if he knew of that error or omission). In order to provide this high level of assurance, a lot of testing and sampling is required by the accountant. Of course that takes time and can be quite costly.
A review provides 60% assurance that there is no material misstatement in the statements of the business. To provide this level of assurance, procedures and testing is required. A lot of questions are asked of management regarding their policies, procedures and controls in order to form the accountant's opinion.
A compilation or notice to reader engagement provides no assurance there is no material misstatement. We do still have to ensure the statements are reasonable. This is the most common form of statements produced and can be used for preparing corporate income tax returns and for management purposes.
At Plett and Associates, we can help with preparing your financial statements and providing an opinion on them. We can do an audit, review or notice to reader.