A Chartered Accountant’s involvement with financial statements lends a different level of credibility to the financial statements, depending on the nature of the CA’s involvement. Standards and procedures for audits, reviews, and compilations are established by the Canadian Institute of Chartered Accountants (CICA). The CICA Handbook prescribes generally accepted accounting principles and generally accepted audit and review standards for Canadian companies and other organizations.
Financial statements are prepared for a company or other organization in accordance with generally accepted accounting principles* (GAAP), and normally include:
- a balance sheet, which shows assets and liabilities as at the year end
- a statement of earnings, which shows the results of operations for the year
- a statement of retained earnings, which shows the changes in equity during the year
- a statement of cash flows, which shows operating, investing, and financing activities and how these activities effect the cash position, and notes to the financial statements, which are an integral part of the financial statements, and which provide additional explanations and details concerning financial statement items.