How This New Accounting Standard Could Affect You
A New Standard for Compilation Engagements (CSRS 4200) was introduced in Canada to replace the Notice to Reader for year ends after December 14, 2021. The new amendment is expected to create more consistency among tax practitioners.
The change means that there will be a minimum level of documentation required from accountants. The new reporting style requires that the financial statements contain a note describing the basis of accounting applied in their preparation.
It will create enhanced clarification for the reader as to what work is done, which will promote greater transparency in the reporting.
There will also be more communication about who the users of the financial statements are and the principles that management has agreed upon for the basis for accounting. These notes will be disclosed in the financial statements, which was not previously the case with the Notice to Readers.
However, some clients may not need a Compilation Engagement as they have no external users and can use internally generated financial information to file their tax returns. However, most people will benefit from how the new financial information gets presented.
On a final note, it’s over thirty years since the Notice to Reader has been revised, so there are bound to be plenty of questions from stakeholders to get up to speed.
If you require further clarification regarding the new amendment or assistance implementing the changes, get in touch with our team today.
With many years of experience, Michael H. Keltz, Chartered Professional Accountant, will help you with all your accounting needs in Toronto, Ontario.
Our professional staff is dedicated to building long-term relationships with our clients, which helps us to anticipate their requirements and add significant value.
Our timely services include accounting, assurance, and tax preparation/ returns. We also offer financial advisory to our clients.
We serve clients across Leaside, East York, Toronto, Mississauga, Vaughan, Brampton, Markham, Oakville, Milton, Ajax, and the surrounding areas.
If you have any questions about tax and accounting, please contact us by clicking here. To learn more about the other services we offer, please click here.