ASSURANCE & FINANCIAL STATEMENTS

A CPA-CA firm can deliver assurance and provide an objective presentation of their financial statements as well as expert advice and observations. TMI CPA Inc. makes sure to involve the right team in every mandate.

There are three levels of assurance in a standard financial statement available:

    • THE AUDIT – HIGHEST LEVEL OF ASSURANCE
    • THE REVIEW – MODERATE LEVEL OF ASSURANCE
    • THE NOTICE TO READER – COMPILATION - NO ASSURANCE

 

ASSURANCE & FINANCIAL STATEMENTS

A CPA-CA firm can deliver assurance and provide an objective presentation of their financial statements as well as expert advice and observations. TMI CPA Inc. makes sure to involve the right team in every mandate.

There are three levels of assurance in a standard financial statement available:

    • The Audit – Highest level of assurance
    • The Review – Moderate level of assurance
    • The Notice to reader – Compilation - No assurance

THE AUDIT

HIGHEST LEVEL OF ASSURANCE

The objective of an AUDIT is to render an opinion on the fairness of a financial statement usually to report to shareholders, to bankers, to creditors and to the government. The financial statements subject to the AUDIT are the responsibility of the company’s management.

The responsibility of the auditor is to give a reasonable assurance that the financial statements are free of material misstatement. To do so, a CPA will gather enough evidence to determine if the financial statements represent a fair picture of the company’s financial position and its activity during the period being audited.

THE AUDIT

HIGHEST LEVEL OF ASSURANCE

The objective of an AUDIT is to render an opinion on the fairness of a financial statement usually to report to shareholders, to bankers, to creditors and to the government. The financial statements subject to the AUDIT are the responsibility of the company’s management.

The responsibility of the auditor is to give a reasonable assurance that the financial statements are free of material misstatement. To do so, a CPA will gather enough evidence to determine if the financial statements represent a fair picture of the company’s financial position and its activity during the period being audited.

THE REVIEW – MODERATE LEVEL OF ASSURANCE

The objective of a REVIEW is to establish whether the financial statements are plausible, that is, worthy of belief. A CPA must review and assert if the financial statements are misleading or not.

When an AUDIT is not required, a REVIEW can provide limited assurance that the financial information complies to generally accepted accounting principles.

In performing a REVIEW, a CPA must have sufficient knowledge of how the business operates in order to make useful assessments of the information gathered. The REVIEW entails discussion, analytical procedures and enquiries on the financial figures presented.

THE REVIEW – MODERATE LEVEL OF ASSURANCE

The objective of a REVIEW is to establish whether the financial statements are plausible, that is, worthy of belief. A CPA must review and assert if the financial statements are misleading or not.

When an AUDIT is not required, a REVIEW can provide limited assurance that the financial information complies to generally accepted accounting principles.

In performing a REVIEW, a CPA must have sufficient knowledge of how the business operates in order to make useful assessments of the information gathered. The REVIEW entails discussion, analytical procedures and enquiries on the financial figures presented.

THE NOTICE TO READER

COMPILATION - NO ASSURANCE

The procedures performed are not intended to allow a CPA to give any assurance on the reliability of the COMPILED information. If a CPA knows, or has any reason to believe that the financial statements are misleading or incorrect, a CPA must not associate with this information. A compilation may be appropriate for financial statements prepared for the exclusive use of the company's management or for income tax purposes.

THE NOTICE TO READER

COMPILATION - NO ASSURANCE

The procedures performed are not intended to allow a CPA to give any assurance on the reliability of the COMPILED information. If a CPA knows, or has any reason to believe that the financial statements are misleading or incorrect, a CPA must not associate with this information. A compilation may be appropriate for financial statements prepared for the exclusive use of the company's management or for income tax purposes.