How will we be billed for services?

All billing arrangements, and an outline of the work that we will be undertaking on your behalf, will be contained in an engagement letter that you agree to before we begin work. In most cases billings are rendered monthly, based on the number of hours that we devote to your file, at rates that we negotiate before starting any particular project.

In cases where work is ongoing and predictable (such as monthly bookkeeping), we can establish a fixed rate that is billed every month. Fixed fees are based on an extensive analysis of the tasks to be included, in other words, on the actual work to be done. You will receive a copy of this analysis for your records.

We need accountant prepared financial statements, what are our choices?

There are essentially three choices, or levels, of financial statements that are prepared by accountants. The names of these levels of financial statements are: Compilation, Review and Audit. [links to items immediately below].

Why are there different levels of financial statements?

The different levels of financial statements reflect the different needs and uses for financial information.

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.

How do I tell what level of financial reporting is right for our organisation?

To answer this question, 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 and external party such as a banker, funding agency or by the fact that 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.

Call us for a more detailed explanation and recommendations based on your specific situation.

Do we need a bookkeeper?

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 Dragomir Liu & Co.

How can I tell if our bookkeeper is doing a good job?

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.

What is GAAP and how does it apply to us?

GAAP stands for Generally Accepted Accounting Principles and also for Generally Accepted Auditing Principles. These extensive sets of principles provide the regulation and guidance for the preparation of all financial information. Each country has its own version of GAAP principles that vary slightly due to societal and regulatory differences. In recent years the difference between GAAP rules in various countries has decreased as these rules become more internationally similar.

All financial information prepared by qualified accountants in Canada must either conform to GAAP rules or state specifically that the information does not conform to GAAP rules. The reason for this is to give the public a level of assurance about the methods used to present and verify financial information as well as ensuring a reasonable degree of comparability between the financial information of similar organisations.

Who creates GAAP?

The GAAP rules are created and maintained by a nationally centred group of qualified accountants. When new or amended GAAP rules are prepared they are submitted to the entire population of qualified accountants for review and comment prior to implementation. The purpose of this method is to ensure that all new rules and changes will have the correct intended effect in improving the value of financial information to all users in Canada and abroad.

What taxes apply to our organisation?

Depending on what your organisation does the following taxes may apply: