Audit, Review, Compilation

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Syed A. Raza Professional Corporation is licensed to perform Audit, Review, Compilation

As professional accountants we offer many services to clients. Clients need our services  at various points: at the planning stage in a new business venture; when tax returns for the business or the owner need to be prepared; when a potential or current lender requires a financial statement; or, when you might need to replace your present accountant. For some, you may need a professional accountant for assistance in your own personal tax planning or retirement planning. Although there are several varied reasons, it is important to understand the work performed by professional accountants.

Professional accountants refer to the work they perform for a specific client as an engagement and it is helpful for users of financial statements to understand the differences between an audit and other accounting engagements.

There are three different engagements associated with the financial statements of a business:

  • Audit Engagements
  • Review Engagements
  • Compilation Engagements

Audit Engagements
The objective on an audit engagement is to enable independent professional public accountants to render an opinion on the fairness of the client’s financial statements.

Audited financial statements are the accepted means which many business corporations report to shareholders, to bankers, to creditors and to government. Federal and provincial legislation in Canada generally requires a limited company (corporations) to prepare annual financial statements for audit by qualified independent auditors.

Review Engagements

The objective of a review engagement is to prepare and review financial statements to ascertain whether they are plausible, that is, worthy of belief. If, after reviewing the financial statements the accountants are satisfied that the financial statements are not misleading, the accountants’ standard report will preface the financial statements.

Compilation Engagements
The objective of a compilation engagement is to compile unaudited financial information into financial statements, schedules or reports based on information supplied by the client.

A compilation engagement is appropriate only where the client and other users do not need financial information that conforms in all respects to generally accepted accounting principles and audit or review assurance is not required, and where the client understands that the statements may not be appropriate for general purpose use.

The procedures performed are not designed to enable professional accountant  to provide any assurance on the reliability of the compiled information. To warn readers of this lack of assurance, accountant attach a "Notice To Reader" that states that no review was performed on the information (as above) and that the information may not be appropriate for use by the reader. Compilation may be applicable where financial statements are prepared for the exclusive use of the company's management or for income tax purposes.

Kindly contact us (647-999-6636 or email: raza@accountantcpa.ca), if you need any of these services.

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