There are a number of impending changes on the horizon, whether
you are a preparer or user of financial statements. Starting in
January 2011, your organization will have to choose a new financial
reporting framework as the old Canadian GAAP is gone
(not-for-profit organizations still have one more year). If your
financial statements are audited, you will also see a new
auditors' report appended to your financial statements.
If your entity's year-end is December 31, 2010, the
auditor's report will have a new look and additional
content. Besides the report being much longer, it has a new title
– Independent Auditors' Report. The new
title is intended to emphasize the independent role of the auditor
from the entity and its management. The revamped report now has
subtitles and there is additional information outlining
management's and auditors' responsibilities. Other
pertinent matters for the reader may need to be included in the
auditors' report depending on the circumstances. Your audit
engagement team will discuss the report and other changes that may
affect your audit before commencing the engagement.
If your organization is considered a "public"
entity, which includes organizations that hold assets in a
fiduciary capacity for a broad group of outsiders, starting January
1, 2011 you must prepare your financial statements using the
International Financial Reporting Standards (IFRS). You should note
that some regulatory agencies are mandating the use of IFRS even if
you don't meet the public entity criteria. Private entities
will start using Accounting Standards for Private Enterprises,
which have been developed in Canada. Not-for-profit organizations
have until January 1, 2012 when they will change over to financial
reporting standards, which will be based on the private enterprise
standards with supplemental standards addressing issues specific to
not-for profits. There are additional reporting requirements in the
first year the entity changes over to the new framework.
A number of resources are available to help you navigate these
changes, not the least of which being your engagement team members
at Soberman. We can advise and guide you through these challenging
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Over the past year, we have watched the Canadian dollar drop relative to its U.S. counterpoint impacting Canadian businesses. U.S. goods and services are now more expensive, U.S. sales make a premium and errors when recording foreign exchange transactions can cost you more money.
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