A weekly report prepared by the staff of the Ministry of Agriculture, Food and Rural Affairs (OMAFRA). If you require further information, regarding this report, call the Elora Resource Centre at 519-846-0941. Office hours: 8:30am to 4:30pm For technical information, call the Agricultural Information Contact Centre at 1-877-424-1300 or visit the OMAFRA website: www.ontario.ca/omafra.
June 15 is the deadline for the self-employed to file income taxes.
Professional accountants refer to the work they perform for a specific client as an engagement. Clients can select from a number of different engagements and the accountant will often help determine which one best suits their needs.
There are three different engagements associated with the financial statements of a business:
– audit engagements
– review engagements
– compilation Engagements
Audit Engagements
The objective on an audit engagement is to enable independent professional public accountants to render an opinion on the fairness of the client’s financial statements.
Audited financial statements are the accepted means which many business corporations report to shareholders, to bankers, to creditors and to government. Federal and provincial legislation in Canada generally requires a limited company (corporations) to prepare annual financial statements for audit by qualified independent auditors.
The auditors must plan the audit to obtain reasonable assurance that the financial statements are free of material misstatement. Through accepted auditing procedures the auditors will gather evidence to determine whether the financial statements present a fair picture of the company’s financial position and its activity during the period being audited.
Review engagements
The objective of a review engagement is to prepare and review financial statements to ascertain whether they are plausible, that is, worthy of belief.
If, after reviewing the financial statements the accountants are satisfied that the financial statements are not misleading, the accountants’ standard report will preface the financial statements.
This degree of assurance is less than that resulting from an audit and is expressed as either:
– The negative assurance that nothing has come to the accountants’ attention that would indicate the financial information is not presented in accordance with generally accepted accounting principles, or
– A reservation together with appropriate disclosure and explanation of the reservation.
Compilation engagements
The objective of a compilation engagement is to compile unaudited financial information into financial statements, schedules or reports based on information supplied by the client.
A compilation engagement is appropriate only where the client and other users do not need financial information that conforms in all respects to generally accepted accounting principles and audit or review assurance is not required, and where the client understands that the statements may not be appropriate for general purpose use.
The procedures performed are not designed to enable accountants to provide any assurance on the reliability of the compiled information. To warn readers of this lack of assurance, accountants attach a “Notice To Reader” that states that no review was performed on the information (as above) and that the information may not be appropriate for use by the reader. If accountants know, or have reason to believe financial statements are misleading or incorrect, they must not associate with this information. A compilation may be applicable where financial statements are prepared for the exclusive use of the company’s management or for income tax purposes.
