The cover letter introduces a company’s financial statements and is written by the business’s accountants. It describes how involved the accountants were in the preparation of the statements—whether the statements are audited, accountant-reviewed or notice-to-reader.
The cover letter also indicates the rules that were followed to prepare the statement and the accountants’ opinion on the reliability of the content.
Any assumptions made in preparing the financial statements are found in the notes to the financial statements.
More about the cover letter
Here is an example of the key elements of a cover letter:
- We have audited the balance sheet of ABC Co. as of March 31, 2012 and the statements of income, retained earnings and changes in financial position for the period then ended.
- They have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board.
- We conducted our audit in accordance with Canadian generally accepted accounting standards.
- We have completed examinations—on a test basis—to support the amounts and disclosure in the statements.
- We have also assessed the accounting principles, significant estimates made by management and overall quality of presentation.
- In our opinion, the financial statements present fairly, in all material respects, the financial position of the company as at March 31, 2012.