Why is my bank asking me for “reviewed” financial statements?
Allan Madan, CA
In certain circumstances when applying for a loan or maintaining a loan from a bank, they require yearly reviewed financial statements signed off by a designated accountant. In the event you fail to provide the reviewed financial statements you can be in default of the loan agreement and the bank can request the money back.
The difference between these financial statements and your regular financial statements is that reviewed financial statements provide moderate assurance to the bank. With specific review engagement procedures through analysis, inquiry, and discussion the designated accountant assures the figures on the statements are plausible.
This gives the bank peace of mind to ensure your meeting the minimum ratio’s to maintain the loan and that there’s no risk in losing the money.
Disclaimer
The information provided on this page is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without consultation from accounting and financial professionals. Allan Madan and Madan Chartered Accountant will not be held liable for any problems that arise from the usage of the information provided on this page.
ABOUT THE AUTHOR
ALLAN MADAN
CA.CPA.CGA
Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.
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