Does your business require ﬁnancial statements prepared to meet requirements for external parties like investors and shareholders? SRJ Chartered Accountants experienced staff can help you determine what type of business financial statements in Toronto best meets your needs. We can guide you through the process and help provide clarity to the readers of your business ﬁnancial statements.
What is a Notice to Reader Financial Statement?
A Notice to Reader Financial Statement is a financial statement compilation engagement prepared by Chartered Accountants providing no assurance (and provides no opinion). The business financial statement has not been audited or reviewed, therefore it does not have the level of reliability associated with audits or review engagements. When ﬁrms offer no assurance on ﬁnancial statements that they prepare or assist in preparing, they issue a Notice to Reader Financial Statement report.
It is still likely to be far superior to a business financial statement produced by an uncertified bookkeeper using accounting software. This is because the overall standards and experience of Chartered Accountants play a significant part in the process of preparing the business financial statements. The bookkeeper does not normally ensure that the accounts used to classify transactions are appropriate, and also does not usually enter transactions that are outside the daily routine of sales invoices, purchase invoices, cheques received and cheques issued.
Since the chartered accountant simply compiles the business ﬁnancial statements based on the information provided by the client, this service is also referred to as a Compilation Engagement.
Providing Notice to Reader Financial Statement
When providing notice to reader financial statement, Chartered Accountant ﬁrms must still comply with professional standards and abide by basic accounting principles. Despite providing no level of assurance on business ﬁnancial statements, the accountant must apply professional judgement and consider the reasonability of the information provided by the client. Should the chartered accountant conclude the information is not reasonable, then the business ﬁnancial statements cannot be prepared based on the data provided.
The chartered accountant’s concerns must be satisﬁed for new ﬁnancial information made available for the notice to reader financial statement or notice to reader report.