Financial Services

Compilation level statements are used for nearly all interim reporting purposes, to present annual statements for closely held organisations and as the basis for tax returns or other similar government reporting purposes.

Except as noted above, Compilation level statements are not suitable for third party reporting purposes such as reporting to your banker, funding agencies or prospective purchasers. In fact, Compilation level statements contain a notice that specifically restricts you from distributing the statements to any third party without written permission from our accounting firm.

Review level statements are used for all of the purposes noted above and are also used for third party reporting purposes that do not include reporting to the general public.

Audit level statements are suitable for any circumstance in which financial information might be needed. Pace Accounting Inc. does not offer audit services as we have elected instead to focus our expertise on issues affecting management accounting. For our clients who have mandatory audit requirements, we work closely with the auditor to provide most of the typical field work requirements that are part of an audit engagement.

There are two factors you must consider. First, ask yourself what purpose the statements will be used for. Next, you will need to determine your budget for the preparation of financial information. Compilation statements are the least costly to produce but are also the least useful. Audits are useful for any purpose but are often very costly to produce. However, you may be required to use audits, when statement requirements are dictated by an external party such as a banker, funding agency or if your organisation is determined to be public in its nature. Generally, the higher the level of assurance that is required concerning the information in your statements conforming to GAAP rules and “fairly representing the financial position” of your organisation, the higher the level of statements that will need to be produced.

Unless your organisation is very small or very simple it is our opinion that every organisation needs a qualified bookkeeper. There are specific skills that a bookkeeper has that are absolutely necessary to the proper operation of any organisation. Good bookkeepers are hard to find. We can help with setting up proper task and job descriptions as well as providing testing materials that will help to determine if a candidate is suitable for your position. If your organisation needs a bookkeeper but you don’t want to hire and manage one, consider using the bookkeeping services offered by Pace Accounting Inc.

It’s often difficult to tell if your books are being kept correctly. Here are some questions that you can ask to determine whether there may be a problem.

Negative answers indicate potential problems.

• Is your bookkeeping always up to date?
• Do you get regular financial statements?
• Are the financial statements always presented as a complete set?
• Do you get additional information that allows you to review the plausibility of the information?
• Do you see proof that your books are being reconciled to the bank, to customer accounts and the supplier accounts?

Positive answers to these questions would also indicate problems:

• Do account balances make radical swings from month to month?
• Do your statements contain accounts with balances that you don’t understand (such as Clearing accounts or Sundry accounts)?
• Are there changes to your Retained Earnings or Net Assets account balances?

If answering the above questions indicates that there may be problems, give us a call. We can look into your bookkeeping practices and provide effective solutions to help get your bookkeeping back on track.