The preparation of financial statements is a crucial step for any business owner. It is a key element in the decision-making process that allows you to plan your company's future activities.
To ensure the reliability and credibility of financial statements, you may need to engage the services of a CPA. Tasks that should be undertaken by a CPA include: compilation, review and audit engagements. The purpose of each of these engagements is to ensure that your company’s financial statements comply with applicable accounting standards.
In this article, our Montreal tax accountants tell you everything you should know about the notice to reader, a important report that is created via a compilation engagement.
What is a notice to reader financial statement?
A notice to reader is a written document issued by an independent accountant or auditor who has reviewed a company's corporate financial statements. It is based on accounting data and information provided by the company's management. It is important to note that this is neither a review nor an audit, and therefore the CPA does not offer any assurance or opinion regarding your company’s financial statements.
The notice to reader provides minimal information and may in some cases be used to obtain a loan. However, it is important to keep in mind that the financial statements obtained through a notice to reader may not be the appropriate documents for your company’s specific goals. It is important to consider whether the notice to reader is sufficient for your needs before proceeding with this process.
Compilation engagement vs. notice to reader
The link between a compilation engagement and notice to reader is quite simple. Basically, when a chartered accountant performs a compilation, they compile the financial data of a company in the form of financial statements.
The document that the accountant will render during the compilation process is called the notice to reader.
Who can prepare a notice to reader?
As of June 2009, only Chartered Accountants (CPAs) with CA, CGA or CMA designations may provide notice to reader documents. However, if the financial statements are only used for internal purposes, you can hire a non-CPA.
It is important to note that in such a case, it is illegal to use the document for external purposes such as obtaining a loan from a bank. Using unofficial documents in this manner could expose the accountant to legal action. It is important to ensure that the persons signing the notice to reader are qualified according to how you plan to use the document.
Prepare a notice to reader with T2inc
Every business owner is responsible for producing annual financial statements that contain accurate information.
T2inc offers services that guarantee the validity of your notice to reader reports. We can assure an independent and professional analysis of your company's financial statements and provide you with a notice to reader that is reliable and compliant with current accounting standards.
Contact us if you need a notice to reader or if you have other corporate tax needs. We can also take care of your T2 and Co-17 returns.
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