Discussion:Annual Report
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Discussion Forum Index --> Accounting Questions --> Annual Report
| 23 October 2009 | |
| Seven weeks ago I prepared reviewed financial statements for a client that I have been working with for several years. Part of what I supply is an unbound copy of the financials that they have reproduced in their annual report that is distributed to their members. Today I received a copy of that report and immediately noticed a difference between what I provided and what is in the report. Specifically, where I put "See accompanying accountant's report and notes to financial statements" at the bottom of each page of the statements, they have replaced it with "See accompanying accountant's report". They also have some of the pages out of order, but I am not too concerned about that.
I intend to make it clear to them that I am unhappy about this alteration but I am unsure what, if anything, I should do beyond that. Can anyone give me some guidance about how much hell I should raise about this? | |
| October 23, 2009 | |
| Did they include the notes to the statements? And has the report been released yet? | |
| October 23, 2009 | |
| Is it possible that the second part of your statement was cut off by the printers? | |
| 23 October 2009 | |
| Thanks for your reply, Natalie. They included all the notes, although the pages are out of order. Two pages of the notes appear right after my review report, before the balance sheet. It all appears to be the fault of the printer. I think they wanted to reposition the statement and in so doing made the change. I always print "See accompanying accountant's review report" on the bottom of each page of notes and " . . .accountant's report and notes to financial statements" on the statements themselves. I think the printer just copied the same thing on to each page, not noticing the difference.
The annual reports have been distributed to all members - over 4500 of them. There are surely other accountants among those members and this has left me looking stupid. At the vary least I will tell them they they need to do a better job of proof reading. I am wondering how harsh I should be with them. | |
| October 23, 2009 | |
| The important thing is that they included the notes, and it sounds like they didn't do this to deliberately mislead people. It's a little late now to do much about the errors, however. You might ask your client to send out a note to all members describing the errors. I think though, that you shouldn't be too hard on your client as part of the responsibility for the error rests with you. I'm not sure if there's a requirement to do so, but you could have asked the client to provide you with a draft of the annual report before it went out. You would have caught the mistake right away.
In addition, if you didn't do so, in the future you should consider adding a disclaimer about the rest of the information in the annual report. ("I did not audit, review or compile the supplemental information etc.") | |
| 24 October 2009 | |
| I will have to find out if I am required to see a draft of the annual report. I have never done so in the past and they have always used an unaltered image of what I supply. Even if it is not required, I will demand to see a draft next year. The problem with that is that I am a terrible proof reader. I guess I'll farm that task out to someone else.
As far as adding a disclaimer about the rest of the information in the annual report, I don't think that is necessary or desirable. The auditors opinions in annual reports from publically traded companies that I have seen do not follow that format. Thanks for your input, Natalie. You are always helpful. | |
| October 24, 2009 | |
| You're welcome, CrowCPA. In some cases it's recommended a short disclaimer paragraph be included with supplemental information provided by the client, e.g. annual reports. This disclaimer does not have to be part of your report. You might want to look at SSARS No. 1 (AR 100.03) and SSARS No. 2 (AR 200.03) for guidance. | |
| 26 October 2009 | |
| I did a bit more research and have found that the problem is not as bad as I had thought. According to PPC the reference to the notes is not required to be on each page of the statements. I thought that it was required and it has always been my custom to include it. The reference to the accountant's report on each page is all that is required and it is only required to be on the statements themselves, not on the notes. That leaves me much more at ease, even though it still looks stupid with the pages out of order. | |
| 26 October 2009 | |
| Whenever I've seen our accountants' reports included in an annual that we produce, our accountants have always demanded that they see and sign off on galleys before we print. This has been in roles I've held at Fortune 100 companies, and tiny private firms. Although there are issues of quality control like the one you noted, there's also the chance that your report will be included in a larger report that contains contrary and/or misleading information. I think you may have a duty to speak up, then, too. | |
| 30 October 2009 | |
| This also says something about the quality of the printer. I don't think I'd use them again if I were the company.
Part of the problem sounds like a collating mistake, which is sloppiness. It think I would have turned down the order, or demanded a refund. It makes the company look bad too. | |
| 2 November 2009 | |
| I will ask if they received a cost break because of the error. They probably could not refuse the whole order because of the time it would have taken to have it reprinted. Their November newsletter arrived today, and it is interesting to see that is was produced by a different printer. | |
