
Small and mid-sized businesses have needs just like “big business” and in many cases these needs can be even greater. It becomes imperative to partner with a business advisor you can trust. We use our knowledge and experience to offer solutions to meet your needs and exceed your expectations. Our advice is customized to help you achieve your personal and business goals and includes:
- Assurance and financial reporting
- Exit strategies and succession planning
Assurance and Financial Reporting
There are several key differences between an audit, a review, and compilation engagement. Essentially, a compilation requires the accountant to simply present financial statements based on the numbers provided by management, with no effort to verify this information. In a review engagement, the public accountant conducts analytical procedures and makes inquiries to ascertain whether the information contained within the financial statements is correct. The result is a limited level of assurance that the financial statements being presented do not require any material modifications. In an audit engagement, the auditor must corroborate the ending balances in the client's accounts and disclosures. This calls for the following:
- Examination of source documents
- Third party confirmations
- Physical inspections
- Tests of internal controls
- Other procedures as needed
Thus, the differences between an audit, a review, and a compilation are as follows:
- Level of assurance: The level of assurance that the financial statements of a client are fairly presented is at its highest for an audit and at its lowest (none at all) for a compilation, with a review somewhere in between.
- Reliance on management: In all three cases, the auditor begins with the account balances provided by management, but an audit requires in a significant amount of corroboration of this information. A review requires some testing of the information, while a compilation almost entirely relies on the presented information.
- Understanding of internal control: The auditor only tests the internal controls of the client in an audit; no testing is conducted for a review or a compilation.
- Work performed: An audit requires a significant number of hours to complete, since there are many audit procedures to be performed. A review requires substantially fewer hours, while the effort associated with a compilation is relatively minor.
- Cost: It requires much more effort for an audit to be completed, therefore it is the most expensive option compared to a review or a compilation.
Another issue is the level of demand for each of these services. The users of financial statements, such as investors and lenders, nearly always demand an audit, since it provides the greatest assurance that what they are reading is a fair representation of the financial results, financial position, and cash flows of the reporting entity.
CPA Canada Understanding Reports on Financial Statements
Exit Strategies and Succession Planning
Succession planning remains a significant issue for business owners in Canada, with a range of economic and business factors placing increased emphasis on proper planning. Many find that they have left exit planning too late and do not have adequate plans in place.
Our experienced Geib & Company business succession professionals work with our clients through every step to ensure that the business and its owners are given the level of support and guidance that is required.
It is important that individual and business requirements are discussed and carefully considered within each personalized plan. We understand that "letting go of the reigns" is very difficult for family business owners who have been actively involved for many years. Our approach helps to make this process as smooth as possible, with a focus on the future success of the business.
Our professionals can assist in the implementation of appropriate governance, risk management and reporting systems that are designed to give business owners knowledge and security as they transition to a less "hands on" role. We can also assist with the recruitment and selection of key personnel and act as a "sounding board" to management if required.
Our succession professionals can work with you to ensure security for your family, your business and yourself, whilst developing the optimum strategy for a successful succession process. There are a number of succession options available to you to ensure the value of your business is protected, including:
- Sale of business
- Generational succession
- Employee/management buy out
- Structured realisation of assets
- Public listing