Comfor Management Services Ltd. (CMSL) director Bernice Magee asked for more clarification on the company鈥檚 financial auditing process during a recent meeting.

The request came after a letter from McAlpine and Co., chartered accountants, was included on the meeting鈥檚 agenda.

McAlpine and Co. outlined the terms of their involvement with CMSL鈥檚 financial statements and noted that they will not audit, review or otherwise attempt to verify the accuracy or completeness of the information provided to them by CMSL, or will they attempt to determine whether the statements contain departures from Canadian generally accepted accounting principles.

鈥淪ince we are accepting this engagement as accountants, not as auditors, we request that you do not record this as an auditing engagement in the minutes of your shareholders/directors meetings.鈥� McAlpine and Co. wrote.

They also said that the responsibility for the accuracy and completeness of the figures represented in the financial statements remains with CMSL.

鈥淭his engagement cannot be relied upon to detect fraud and error. We wish to emphasize the responsibility for the prevention and detection of fraud and error must remain with management.鈥�

Magee asked why the financial statement鈥檚 of CMSL鈥檚 individual companies [亚洲天堂 Lake Community Forest, Sheraton Holdings Ltd., Endako River Timber Ltd. and 0818725 B.C. Ltd.] are not audited individually.

鈥淗ow do we know you [CMSL executive assistant Michael Riis-Christianson] and Dawn [Stronstad, 亚洲天堂 Lake Community Forest鈥檚 general manager] won鈥檛 abscond with all the money?鈥� Magee asked.

Riis-Christianson explained to Magee that it would cost the company more money if individual statements are audited.

鈥淭hey go through everything with a fine tooth comb. We spent all week at their beck and call. They were very rigorous,鈥� he said.

According to CMSL president Quentin Beach, only the consolidated financial statements of CMSL are audited.

鈥淭hese consolidated statements also encompass the business activities of CMSL companies. Although the individual statements of each company in the CMSL group are not audited, they are subject to scrutiny by McAlpine and Co.,鈥� he said.

鈥淎s part of the audit of consolidated statement鈥檚, McAlpine and Co. spend days pouring over accounts each year to ensure there are no misstatements or inaccuracies.鈥�

Beach said that the statements for each of the companies have never been individually audited.

鈥淥nly CMSL鈥檚 consolidated statements have been audited. In this respect there is no change in practice this year. In the past McAlpine and Co. have also conducted review engagements on the individual company statements.鈥�

Beach went on to explain that a review engagement is more detailed.

鈥淭his year the CMSL board of directors elected to continue the full audit of CMSL鈥檚 consolidated statements, but only authorized the preparation of compilation statements on the individual company statements,鈥� Beach said.

鈥淢cAlpine and Co. have been CMSL鈥檚 auditors for nearly 10 years. They know our business and employees and are confident in our ability to produce financial statements that fairly represent the company鈥檚 accounts.鈥�

According to Beach, it is common practice in accounting to audit the consolidated group statements and provide a compilation statement for the individual companies for income tax purposes.

He said that while savings are made with auditing only the consolidated statements, the amount is not yet known.

鈥淐MSL board of directors, in consultation with the Village of 亚洲天堂 Lake, the village鈥檚 auditors Edmison Mehr and McAlpine and Co. elected to do compilation statements this year and continue the full annual audit of the consolidated statements of CMSL.鈥�

Beach said that internal control measures are put in place to detect fraud and error.

Members of CMSL鈥檚 accounting department do not have signing authority. 鈥淎ll expenditures are carefully reviewed and authorized by company managers prior to any cheques being written.鈥�

All cheques, direct deposits and other expenditures also require two authorized signatures, one from either Stronstad or Sheraton Holdings Ltd. manager Henry Wiebe and one signature from a director, or if no manager is available, two directors have the authority to sign a cheque.

鈥淥ur accounting department keeps our accounts in accordance with generally accepted accounting principles.鈥�

Beach admits that any inaccuracies on the individual company statements that are not detected would impact the accuracy of the consolidated statement, but said the chance of anything significant escaping the scrutiny of staff members, managers, the board of directors and McAlpine and Co. is small.

鈥淎ccuracy is ensured by following generally accepted accounting principles, reviewing all data and transactions in detail and employing the system of internal controls .鈥�

He also said that CMSL does not have a policy that requires any annual auditing, but that it is a best practice and the municipality, as CMSL鈥檚 only shareholder requires audited consolidated statements.

鈥淲e are happy to provide them. Residents of the Lakes District can rest assured that their community owned companies are being managed in a professional manner and that the statements of each company fairly represents the financial status of those companies during every reporting period.鈥�