Purpose of Financial Statements

The objective of financial statements is to provide information about the financial position, performance, and changes in the financial position of an enterprise that is useful to a wide range of users in making economic decisions (IASB Framework).

Following are the main users and their respective use of financial statements:

Types of Financial Statements

i. Audited
ii. Reviewed by an accountant
iii. Notice to Reader

All three are prepared according to International Financial Reporting Standards (IFRS) or Accounting Standards for Private Enterprises (ASPE)

What is a Notice to Reader Financial Statement?

Notice to Reader statement is simply a compilation of raw financial data provided by the company’s management. The name ‘notice to reader’ signifies to alert users that the information does not undergo an audit or review, and therefore, the accountant preparing it offers no opinion or assurance on the accuracy of financial statements. Accordingly, they simply put the readers “on notice.” This engagement is also referred to as a “Compilation engagement”.

Who can prepare Notice to Reader Financial Statement?

Notice to Reader Financial Statement cannot be prepared internally by the business owner or the in-house bookkeeper using the company’s accounting system. The company’s accountant can be well versed with accounting aspects, but they may not be able to issue NTR financial statements.

It is prepared by the licensed external qualified accountant. Although no assurance is provided by the preparer of the notice to reader financial statement, the accountant must still comply with professional and ethical standards and abide by basic accounting principles.

Why does a Business Need Notice to Reader Financial Statements?

It is very clearly stated by the preparer on the cover letter to these financial statements that “Readers are cautioned that these statements may not be appropriate for their purposes' '. This signifies that NTR financial statements are usually prepared with a very specific purpose. Here are some definite reasons for which NTR financial statements may be prepared:

Imperative Components of Notice to Reader Financial Statement?

Advantages of Notice Reader Financial Statement

If you are looking for a professional Accountant and bookkeeper who can provide quality service in preparing “Notice to Reader Financial Statements” for your business, then it is best to reach out to any accounting firm like Filing Taxes. Schedule an NTR engagement appointment with us and take the first step towards proper management of your finances.

Disclaimer:
The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.

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