Since its introduction, the need for companies’ financial statements to be audited by an independent external auditor has been a cornerstone of confidence in the world’s financial system. The objective of a financial statement audit engagement is to allow independent Chartered Accountants in Toronto to render an opinion on the fairness of the client’s business financial statements. When a company has to go through the audit process, an auditor may use the term “audit engagement.” This can mean different things, so it is important that the auditor or Chartered Accountant to clarify what he or she means when they use the term. The auditor or Chartered Accountant always follows specific procedures and guidelines for handling the engagement. The benefit of a financial statement audit in Toronto is to provide reasonable assurance that management has presented a ‘true and fair’ view of a company’s financial performance and position. Financial audits in Toronto enhances the degree of confidence of intended users and are preferred by shareholders, government, banks and other creditors. Federal and provincial legislation in Canada generally requires corporations to prepare annual financial statements for audit by qualified independent auditors.
Other common engagements providing reasonable assurance like that of financial audits in Toronto include:
- Operational audits
- Comprehensive audits
- Internal audits
- Compliance audit
The business financial statement audit in Toronto are the responsibility of the company’s management. The auditors’ responsibility is to express an opinion on those business financial statements. The Chartered Accountant in Toronto must plan the audit to obtain reasonable assurance that the business financial statements are free of material misstatement. The procedures required for the financial audits in Toronto include substantive testing of account balances through analysis, inquiry, inspection, observation and confirmation. Chartered Accountants performing the audit engagement focuses on independent evidence. This process is much more lengthier than a review, which enables professionals to provide a higher level of assurance through the issuance of an Auditorsʼ Report stating that the companyʼs business ﬁnancial statements are in accordance with Generally Accepted Accounting Principles (GAAP). When issuing an opinion, the Chartered Accountant in Toronto is also required to provide audit findings and/or management letter. The management letter summarizes the accountantʼs evaluation of the clientʼs internal controls, signiﬁcant accounting policies, unusual transactions, disagreements with management and other pertinent ﬁndings. This service is not available for Reviewed Financial Statements since many of these evaluations are only performed during an Financial Statement Audit Engagement Toronto.
Choosing an engagement: review, audit or compilation?
When providing advise on the level of assurance to be provided depends primarily on the users of the financial statements. Those providing capital such as bank loans, government grants, contribution agreements, or even the issuance of public equities or securities often require clients to provide business ﬁnancial statements that have some level of assurance. Partnerships and other joint ownership arrangements may also require assurance as a way of making sure that bonuses, salaries and cash is allocated and spent properly. Parties engaged in revenue and proﬁt sharing agreements may also seek assurance to verify that the ﬁnancial statements are materially accurate.
Assurance provides a number of beneﬁts, including:
- Management letter advising on various internal operations;
- Increased ﬁnancial statement reliability;
- Reduced risk of ﬁling an incorrect or inaccurate corporate tax return; and
- Enhanced ﬁnancial statement credibility, which is important if the client plans to:
- seek ﬁnancing from a third party
- sell their shares
- request some form of government ﬁnancing
- issue public securities.
SRJ Chartered Accountants can provide audits for public and private corporations as well as, not-for-profits.
If you would like to find out if your organization requires a financial statement audit or an audit engagement report attached to the business financial statements please email us at (email@example.com) or call the office to speak with one of our experience Chartered Accountants (647-725-2537). SRJ Chartered Accountants will take care of your financial statement audit in Toronto so you can focus on what’s important – the success of your business!