Disclosure of information- According to Canadian generally accepted accounting principles, certain specific types of information must be disclosed on a company’s financial statements or in the attached notes to the financial statements. The required disclosures are very numerous and are listed in the Handbook of the Canadian Institute of Chartered Accountants. Here are a few examples: (a) accounting policies used for measuring inventory, carrying amounts of inventory at net realizable value, (b) for pension plans, a summary description of the plan, the funding policy, a description of how fair values have been determined, and details of investments in the plan sponsor, and (c) revenue recognition policy. The disclosures are not required for Notice to Reader financial statements to the same extent as for audits and review engagements.

Notice to Reader- Financial statements prepared by a Canadian Chartered Accountant without audit or review. This form of financial statement is also known as a compilation engagement, since financial statements are being compiled on the basis of information provided by the management of the company. This form of financial statement is typically used when the main user of the financial statements is the government, as an attachment to the corporate income tax returns. This form of financial statements is not usually appropriate for users like banks or other creditors of the company, since they are not designed to provide assurance that the numbers contained within the financial statements have been verified by the Chartered Accountant and can be relied upon.

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