Clearly Financials is updating our clients and small businesses in Edmonton with important changes for compilation engagements. Compilation engagements are part of the “year-end” package Chartered Professional Accountants (CPAs) provide, including the preparation of corporate financial statements.
For the first time in over 30 years, a new set of standards has been released called the “Canadian Standard on Related Services 4200 Compilation Engagements” (CSRS 4200). All professional accountants, namely Chartered Professional Accountants (CPAs) in Alberta, must follow these new standards.
Why Are Changes Being Made?
It was previously assumed that only management used the financial information. The new standards ensure that corporate financial records meet the needs of third-party users, including lenders.
There was a lack of consistency in the accounting industry. The new framework standardizes compilation engagements.
The previous standards led to ambiguity about the responsibilities of the practitioner and the extent of work done. The new standards define the level of documentation and work required.
What Stays The Same ?
Clearly Financials Professional Corporation will continue to prepare “year-end” packages, including the preparation of the financial statements and federal and provincial tax returns for our valued clients.
At Clearly Financials, we pride ourselves in providing a high-quality service and will continue to exceed the standards while providing great accounting and tax services.
What Changes ?
There will be some additional questions that will be asked in the following ways:
Our clients will receive a secure, electronic form via email to complete,
We will call our clients for questions that require clarification.
There is a new, expanded letter which outlines management's understanding of their responsibilities, and the services Clearly Financials provides to management.
What Will Look Different?
There will be a change in name of the report included in the financial statements package:
The previous report was known as the Notice to Reader Report (see sample).
The new and more thorough report is called the Compilation Engagement Report (see sample).
The two most important changes to the report are:
Recognizing third-party users (i.e. lenders) of financial information, and providing additional information to such users,
Documenting the basis of accounting.
For more information about the new CSRS 4200 Standards, please refer to the following Management Briefing provided by CPA Canada, our governing body.
The new accounting standards are mandatory for all professional accountants to follow. Clearly Financials Professional Corporation will endeavor to make the transition to the new standard as smooth as possible.
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Clearly Financials offers Smart Accounting and corporate tax services to small businesses in Edmonton, AB. We provide a full suite of services including: Bookkeeping, Payroll, GST filing, Notice to Reader Financial Statements, and Corporate Tax Returns.
We enjoy helping small business owners get setup and hit the ground running. We offer Business Foundation Services which include business plan creation and business structure selection (e.g. to incorporate a business, or operate as a sole-proprietor).
Our Business Performance Management services help small business owners grow their companies, and their profits through goal-setting, budgeting and forecasting.
Our office is located in Old Strathcona in Edmonton, Alberta.
This is a summarized version of complex matters that are rapidly changing. The preceding information is provided for general, educational purposes only. Speak with one of our team members if you have any questions about your specific accounting or tax situation.