State It

By Murtaza Adamjee

Rukshana Dinshaw is the partner in charge of Professional Practice at Soberman LLP Chartered Accountants. Having gained over 20 years of experience in the finance industry, Rukshana is also the quality control partner setting standards for the firm and ensuring professional standards are always complied with. She has been with Soberman LLP for eight years.

For this issue of Women’s Post, I had the chance to discuss financial statements and what the new entrepreneur needs to know – and who better for the tutorial than Rukshana herself.

A financial statement is a formal report that describes the financial activities of a person, business, or entity. Typically, it includes three components: a balance sheet, an income statement, and a statement of cash flows. A set of explanations and notes are also included to describe the report in further detail.

From the perspective of a new company or enterprise looking to have their financial information presented in a structured manner, Rukshana notes that it is critical to decide the statement’s users – who will be using the report and for what purpose. And depending on the industry, financial statements can be used by a number of different users, for a number of different purposes.

For example, financial statements can be used by owners and managers for internal management purposes, by banks to assess whether or not to grant a company with working capital, or by investors to assess the viability of an investment.

And although most new companies have their own bookkeepers, external accountants like Soberman LLP are often needed to report on a snapshot of a company’s finances at some point in time.

There are three types of reports that are offered by Soberman LLP and each provides its own level of comfort and assurance.

A compilation report does not provide any assurance: External accountants, such as Soberman LLP, simply take a company’s financial records and organizes them into a format that’s understandable.

A review report is a reliable report that provides a certain level of comfort by providing negative assurance: Essentially, this demonstrates that nothing comes to the attention of the accounting firm that is not within accounting principles.

An audit report provides the greatest level of comfort: External accountants find evidence to ensure that the numbers are within generally accepted accounting principles, and these numbers accurately present the financial position of the company.

In addition to financial statements, Soberman LLP offers business and consulting advice. When investing in physical capital, leasing versus buying equipment is usually one of the biggest dilemmas facing new companies. Rukshana and her team help ensure new companies make the right choice – from the start. Soberman accountants also help clients obtain financing, and implement controls a new company should have in place from inception. For more information visit soberman.com.

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