What is a Notice to Reader/Compilation?Ī notice to reader or compilation is simply a compiling of information into financial statements, based on information provided by their client. An audit, on the other hand enables a positive assurance allowing the accountant to state in their auditor’s report that the financial statements are in accordance with Canadian accounting standards for not-for-profit organizations. This means that as the professional accountant is only providing assurance that nothing has come to their attention that would indicate the financial information is not presented in accordance with Canadian accounting standards for not-for-profit organizations. While an audit is meant to give some assurance that the financial statements are free of material misstatements, a review engagement is only meant to ascertain whether or not the financial statements are believable or plausible.Ī review provides limited assurance that the financial statements conform to generally accepted accounting principles. The Canadian accounting standards for not-for-profit organizations refer to a section (Part III) of the CPA Canada Handbook which outlines all current accounting standards and rules in Canada on accounting and assurance.Ĭanadian generally accepted auditing standards for not-for-profit organizations are standards against which the quality of audits are performed and may be judged. It acknowledges that limitations exist in all systems of internal control, and that uncertainties and risks may exist, which no one can confidently predict with precision.Īuditors use a variety of methods to determine if the financial statements are free of material misstatement, including study and evaluation of internal controls, inspection of documents, physical counts of assets, making enquiries inside and outside the company, and other procedures that support the Canadian generally accepted auditing standards for not-for-profit organizations. The term “reasonable” is necessary because absolute assurance is not possible. An audit provides “reasonable assurance” that the financial statements are free of material misstatement and are in accordance with Canadian accounting standards for not-for-profit organizations. The objective of an audit engagement is to enable the independent professional public accountant to issue an opinion on the fairness of the client’s financial statements. Association incorporated under the Canada Not-for-profit Corporations Act (CNCA) must follow the specifics of the Act and details on this can be found in a previous article on that topic. The type of engagement you need could also depend on bookkeeping services required or various other factors affecting your association. If they do not, the type of service you require will depend on the degree of assurance you need to ensure that the financial statements are free of material misstatements. Audits and Review Engagements are the typical year-end services offered by professional accountants to association and not-for-profit clients.įor an association, the by-laws may dictate which type of service is required.
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