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Financial Reporting

Notice to Reader Engagements

Also known as compilation management, notice to reader engagements is mostly used in Canada as a form of financial statements. A snapshot of your business is given by the year-end financial statements. Business owners or managers that don’t have material financing management or external stakeholders will find NTR engagements useful. This goes hand in hand with the tax return, year-end adjustments, and GST/HST return preparations. If you are a business owner in Canada and you want an accounting firm that adheres to the Canadian Accounting standards, then eFinancialz is perfect for you. We also use an acceptable financial reporting framework for internal management and in case third parties request it.

 

There is no assurance of the accuracy of the prepared financial statements from the accountant since the statements haven’t been audited or reviewed. It does not mean that the report is not important because other users like the stakeholders and directors of the firm find it useful. The notice to the reader’s goal is to prepare and present financial statements from the information given by the management. The info needs to be correct and not misleading or represent the opinion of the management.

Reasons why you need to prepare a notice to reader engagements

It helps to overstate income due to the overpayment of corporate taxes. You can send it to the government for reviewing financial statements or you can also use it for tax returns. Notice To Reader also helps to highlight problematic areas and resolve them early before they lead to fines and penalties. When you improve on those areas, you help the company stay within its budget by reducing unnecessary expenditures. You can easily meet your yearly business goals when you eliminate such issues using the notice to reader engagements. Apart from cost reduction in running your business, notice to reader engagement allows you to prepare financial statements easily with no strains. As a firm, you can use this info to make better decisions regarding your business.

What eFinancialz does better than others?

When preparing financial statements the team at eFinancialz doesn’t just use trial balance numbers and charts of accounts. We design financial statements to reflect the true and fair view of the business. We don’t rely on whether a firm does its bookkeeping when preparing notice to reader statements or regularly. We prepare the year-end financial statements by following these vital processes:
  • We check if anything is missing or if there are any errors in the accounts by scanning the company’s chart of accounts.
  • We then request for a summary of all recorded transactions from the bookkeeping software for the fiscal year-end of your firm, including the trial balance.
  • We also ensure that the current trial balance uses the same GIFI codes that were used in the corporate tax return in the previous year.
  • Perform scrutiny of transaction or General Ledger analysis.
  • Ensure that a bank reconciliation statement is prepared.
  • Ensure GST/HST reconciliation preparation.
  • Prepare payroll reconciliation.
  • Post accrued expenses, depreciation, interest & penalties not recorded, interest or penalty recorded as remittance towards taxes or statutory dues, re-assessment, and other year-end adjustment entries.
  • Corporate tax returns are obtained from the notice to reader financial statements.
  • The corporate income tax returns are then finalized what is gotten from it reflects the final adjustment entry and the notice to reader financial statements.
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eFinancialz financial reporting pageReview Engagements

Review Engagements

To conclude that the financial statements are stated fairly an accountant needs to conduct a review engagement with as few steps as possible. By doing this, all the doubts of whether it was fairly done or not, will be cleared. According to the accepted standards for review engagements, a review is seen as an ‘assurance engagement’. An accountant uses limited procedures like analyzing the financial info and engaging with the managerial team. This helps you to clear doubts that the financial statement was done fairly. The size of your credit facility will determine the level of assurance that satisfies the lender. It also gives the firm vital financial statement insights.
Even though a review engagement is not as stringent as an audit, it is performed when:
  • The threshold of the borrowing doesn’t go beyond a certain amount.
  • Dealing with multiple owners and each requires assurance independent assessment was done to get the financial statements.
  • It is a requirement from the Federal or Provincial regulation according to the total revenue.

Our Process

We have a team of experts that clearly understand the level of risk that goes into certifying a review engagement. We also understand how valuable it is to the owner and other stakeholders interested in the financial statements. The steps in the process increase as the risk increases. It allows us to double-check everything to ensure that there are no doubts as to whether the financial statements are fair or not.

 

Besides performing the Notice to Reader Engagement procedure, we also do the following:

  • Acquire from the management a written representation about the accuracy of the information given.
  • To implement and maintain internal controls, we will need to obtain managements’ responsibility. This helps us to detect and prevent fraud. Conduct ratio analysis and analytical procedures.
  • Under the Canadian accounting standards, we will accompany your financial statements with notes that form an integral part of the statements.
  • For future reference, we will keep and maintain proper records.

Cash Flow Statements

The cash flow statement refers to a financial document that gives reports on how much money your company spends and how much is available at a given time.

 

The three primary documents that reflect the firm’s condition financially are income statements, cash flow statements, and the balance sheet. However, a cash flow statement may not be a part of these two documents sometimes. The firm’s assets and debts are outlined on the balance sheet. An overview of the firm’s revenue and expenses are represented by the income statement. The cash flow statement deals with the money that enters and leaves the company. Money leaves the company through operations, financing, and investing.

 

Net income isn’t similar to cash flow. It is the income that is reported on the income statement or the balance sheet. Net income shows sales made in credit, while cash flow includes money that was collected and spent by the company.

 

To know how much money the firm generates, you need the cash flow statement since this info is included in this document. Leaders and potential investors can see the company’s financial state and the day to day operations are made easier.

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