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FINANCIAL RESULTS: UNCOVERING A TRUE AND FAIR VIEW

FINANCIAL RESULTS: UNCOVERING A TRUE AND FAIR VIEW

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CPV STORIES

A trading company, with a focus on buying and selling bonds and shares, contacted us to review their annual financial statement prepared by an accounting firm in Cyprus.


The request included an investigation of any possible misstatements in the financial reports due to income miscalculation. The company owner claimed the bookkeeping to be improper, resulting in distorted financial results, which in turn showed a lower amount of income than the company actually earned.  The above conclusion was based on the owner's personal Excel calculations recorded throughout the year.  
The income in his own calculations were equal to 20 million, while the final statements reflected sales at 10 million. The number of securities traded through the brokerage account and posted in the accounting books fully reconciled with the number of securities shown in the owner's Excel file. At the same time, the values of transactions had substantial differences. Taking the matter in our own hands, our priority was to thoroughly investigate the accounting records further and review the Excel spreadsheet.  
FINANCIAL RESULTS: UNCOVERING A TRUE AND FAIR VIEW
To avoid miscalculations and distorted financial results in a financial report, it is important to keep your accountant updated on your plans and any accounting policy changes. CPV Corporate suggests informing your accountant by email or via phone calls about any of these changes at the earliest time. 

HOW WE HELPED

Following a deep analysis of the problem, we identified that the market costs of bonds and shares in the financial statement differed from the costs recorded in the spreadsheet.


As a result, the wrong data was given to the accounting firm to complete the accounts. We concluded that the accounting company was using historical prices, resulting in miscommunication between the company and client.  The client’s company policy of monthly revaluation of securities market value was in place, however the client did not communicate this change to their policies.  

Our methodical investigation helped the company's owner identify the reason for the differences and was consulted on correcting the gap. As a result, a reliable financial statement was prepared, showing the financial results' true and fair view.
FINANCIAL RESULTS: UNCOVERING A TRUE AND FAIR VIEW

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