Do You Know How to Read an Audited Financial Statement?
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Do You Know How to Read an Audited Financial Statement? Justin Wareham Millards Chartered Accountants
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eading audited financial statements may seem mundane, but they have so much to tell about the current and future financial health of your corporation. Having a greater understanding of the financial statements can help lead to less contentiousness at board meetings or your next annual general meeting. I have identified several items below to keep in mind when reading your corporation’s audited financial statements.
Independent Auditor’s Report The independent auditor’s report outlines the auditor’s opinion as to whether the statements are presented fairly and are free from material misstatement or not. It is important to note that even though the report may reflect a “clean” audit opinion, this does not necessarily mean that your corporation is in good financial health. The operating and reserve surplus balances on the statement of financial position and the notes to the statements are all key to determining the current and future financial health of your corporation. If your corporation is not in compliance with the Condominium Act, an emphasis of matter paragraph will be included in the report. Some common violations of the Condominium Act include not approving a reserve fund study within three years of the previous study or holding an ineligible investment such as a non-redeemable GIC. The notes to the financial
Condo News – WI NTER 2020
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