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Annual Financial Reporting Document Review

An all-in-one disclosure checklist


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The proliferation of new accounting standards and regulatory requirements continued throughout 2006. New accounting rules, enhanced CEO/CFO certification requirements, augmented continuous disclosure standards, corporate governance practices and disclosures, and civil liability for secondary market disclosures are just a sample of the standards which became effective during the year. With the myriad of new requirements, it may be difficult for management and Directors to analyze all of the standards and guidance issued and to develop an action plan to ensure that they fulfill all of their existing and increasing responsibilities.

To this end, Deloitte has prepared the following comprehensive assessment package to help management and Directors determine whether or not their organizations’ financial statements and other financial filings meet all of the continuous disclosure obligations. Correspondingly, using these tools to analyze their financial filings may assist users in performing their due diligence responsibilities. The assessment package is comprised of four parts:

2006 in Review — this document will allow users to specifically address the impact of new accounting developments in their review of the company’s public filings which include the financial statements. A series of suggested questions which should be considered to ascertain whether the standards were appropriately applied and whether all of the options/alternatives available as well as the impact on the financial statements were considered prior to the selection of an accounting treatment have been included;

Review of the 2006 financial statements — an assessment tool to evaluate your company’s financial statement disclosure. The requirements as set out in the CICA Handbook are included, along with an area for users to include commentary specific to their company;

MD&A Evaluation — an assessment tool to evaluate your company’s Management Discussion & Analysis (MD&A). The requirements as set out in National Instrument 51-102 are included, along with an area for users to include commentary specific to their company; and

AIF Evaluation — an assessment tool to evaluate your company’s Annual Information Form (AIF). The requirements as set out in National Instrument 51-102 are included along with an area for users to include commentary specific to their company.

Organizations cannot afford to underestimate the impact of the continuous disclosure obligations. This issue is of specific importance for the 2005 year end due to the secondary market civil liability and the certification of disclosure controls both of which effect companies with calendar year ends.

Deloitte’s professionals offer a range of solutions that can be customized to meet your organization's specific compliance needs.

Subject to appropriate independence safeguards and service pre-approval, Deloitte can assist you to ensure that that your disclosures are complete, as well as helping in the implementation of governance best practices.

Next Steps

Now that you have completed the analysis of your organization’s 2006 annual documents listed below are some suggested next steps in performing your due diligence:

Evaluate Your Results

  • Discuss your findings with the other audit committee members, management and your external auditors.

Establish Your Action Plan

  • Identify what needs to be done to ensure the annual documents are compliant, relevant and transparent.
  • Review with your external auditrs their GAAP quality assessment of the financial statements.

Keep current with the new accounting and regulatory pronouncements affecting your financial reporting.