Whatever type of business entity you operate – a corporation, partnership, unincorporated business, not-for-profit organization (including registered charities) – you are probably required to prepare financial statements.
Generally, financial statements include:
- a balance sheet
- an income statement
- a statement of retained earnings or net assets, and
- a statement of cash flows.
Accompanying financial statements are various notes with additional information on matters included in the statements or about issues that require disclosure.
Financial statements are essential for at least two purposes:
- to assist the owner/manager or management in their decision-making roles; and,
- to accompany the majority of tax filings.
Most owner/manager businesses and not-for-profit organizations require the involvement of a public accountant to prepare their financial statements.
Boards of directors, lending authorities and certain other third parties usually require business entities to submit financial statements and an assurance report issued by a licensed public accountant.
If you are an owner-manager, you may wish to obtain an assurance report for your business entity’s financial statements. This report provides a degree of assurance that financial information in the statements is accurate and complete.
You might also be asked by a funder or regulatory agent to provide assurance on your business entity’s compliance with statutes, regulations, or agreements.
Like other public accounting firms, Logan Katz offers two types of engagements that result in our issuing an assurance report:
- Review Engagement
For review engagements, we ask questions, conduct analytical procedures, and hold discussions to assess whether your business entity’s financial information is plausible.
Review engagements are a cost-effective way for business entities to issue financial statements that satisfy the needs of creditors (usually financial institutions).
An audit is the highest level of assurance work public accounting firms like Logan Katz offer. We conduct audits according to a comprehensive set of standards, referred to in Canada as Generally Accepted Auditing Standards. These standards harmonize with International Auditing Standards.
The audit engagement involves performing procedures to obtain audit evidence to assess whether your business entity’s financial information is fairly presented, in all material respects, in accordance with a defined financial reporting framework in Canadian Generally Accepted Accounting Principles.
Not-for-profit organizations (including registered charities), and businesses with external boards of directors and/or significant external financing from shareholders or lenders generally require audits. Publicly traded companies do as well.
What you can expect
For all assurance engagements, public accountants must be fully independent from their clients and objective in expressing their opinions.
If you select Logan Katz as your business entity’s public accountant, you will certainly benefit from our value-added approach, including a face-to-face meeting to discuss our findings and other matters such as any concerns you might have, risk management, your information technology structure, human resources, and other compliance matters (e.g. sales tax).