Review, Compilation and Audit Engagements
Does your business meet Canadian standards? Find out with an audit. In the St. John’s area, Feltham & Associates can perform audit, review, and compilation engagements for your company under guidelines. Each engagement differs in the scope of work performed and the level of assurance provided.
Audits enable independent professional accountants to render an opinion on the overall fairness of an organization’s financial statements. An auditor will plan and perform an audit to obtain reasonable assurance that the statements are not materially misstated due to fraud or error. The management of an organization is responsible for keeping financial statements.
Audits are the most entailed and costly engagements due to the level of processes they involve. Very few “for-profit” businesses without extensive public funding or public interest actually require an audit.
A review is often carried out for one of two reasons: if an organization receiving significant financing has a loan agreement stipulating this level of assurance or if an organization looking for financing believes the added assurance might be beneficial.
Like compilations, reviews start with balances provided by an organization’s accounting system and aim to verify their accuracy through processes which:
Reviewers will also analyze revenues and expenses to add some assurance as to their reasonableness. Review engagements involve less processes and procedures than audits but substantially more than compilation engagements.
Financial statements for compilation engagements are prepared in conformity with Canadian standards in terms of presentation, but all the numbers are based on information provided by management. Verification procedures are not required.
For example, information for a “payables” listing would be gathered from an organization’s Simply Accounting or Quickbooks software. This data would be reviewed with the organization to insure there are no noticeable or significant errors or omissions. An accountant would not examine every balance or reconcile them to an independent supplier statement.
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