6 worked Financial Statement Preparation case studies — the position a client typically comes to us with, what we do, and what it is worth. Each is an illustrative example built on the rules that apply to financial statement preparation work, not a specific client's file.
Case Study 1 · Objection and relief
Notice Of Objection Allowed In Full, $102,000 Reversed — Restating Corporation, Halifax
Client: A corporation restating a prior year · Where: Halifax, Nova Scotia · Engagement: 10 weeks, fixed fee
Amount reversed$102,000
ObjectionAllowed in full
Account balanceNil
The situation — A corporation restating a prior year, Halifax, Nova Scotia
A corporation restating a prior year in Halifax, Nova Scotia had been reassessed for $102,000 and had 8 days left on the objection deadline. The reassessment rested on an insurer asking for statements from an independent practitioner who had also been writing the bookkeeping entries.
What we did for A corporation restating a prior year, Halifax, Nova Scotia
We filed the objection inside the deadline with a complete submission rather than a placeholder, and prepared the supporting schedule for every material balance in advance, which cut the queries the engagement had to raise.
The result — A corporation restating a prior year, Halifax, Nova Scotia
The appeals officer allowed the objection in full. $102,000 was reversed and the account returned to a nil balance.
Case Study 2 · Cash and remittance control
Instalments Rebased, $89,000 Of Cash Returned To The Business — Late-Statement Business, Hamilton
Client: A business whose statements arrive late every year · Where: Hamilton, Ontario · Engagement: 7 weeks, fixed fee
Cash returned$89,000
Instalment basisCurrent year
ReviewedQuarterly
The situation — A business whose statements arrive late every year, Hamilton, Ontario
A business whose statements arrive late every year in Hamilton, Ontario was paying instalments calculated on a prior year that no longer reflected the business. A bonding limit capped because the last statements were prepared on a cash basis was tying up $89,000 of cash.
What we did for A business whose statements arrive late every year, Hamilton, Ontario
We rebased the instalments on the current-year estimate rather than the prior-year default, and read the shareholder agreement and the loan documents, established what level of assurance each user actually required, and scoped the engagement to the highest of them.
The result — A business whose statements arrive late every year, Hamilton, Ontario
$89,000 of cash stayed in the business, the penalty cycle ended, and the instalment position is reviewed each quarter against actual results.
Case Study 3 · CRA review defended
$97,000 Proposed Adjustment Withdrawn In Full — Due-Diligence Vendor, Ottawa
Client: A vendor assembling due-diligence records · Where: Ottawa, Ontario · Engagement: 7 weeks, fixed fee
Adjustment withdrawn$97,000
File closed in7 weeks
Penalties assessedNone
The situation — A vendor assembling due-diligence records, Ottawa, Ontario
A vendor assembling due-diligence records in Ottawa, Ontario received a proposal letter opening a review of financial statement preparation. The CRA had identified a shareholder agreement calling for audited statements that had been satisfied with a compilation for years and proposed an adjustment of $97,000, with 30 days to respond.
What we did for A vendor assembling due-diligence records, Ottawa, Ontario
We treated the response as an evidence exercise rather than an argument. We converted the records to the accrual basis, restated the comparative year with proper disclosure, and rebuilt the statement package around the bonding company’s requirements, then indexed every supporting document against the specific line the auditor had questioned.
The result — A vendor assembling due-diligence records, Ottawa, Ontario
The proposed adjustment was withdrawn in full — all $97,000 of it. The file closed in 7 weeks with no change to the assessed amounts and no penalty.
Case Study 4 · Backlog brought current
Collections Halted And $33,000 Cut From A 3-Year Backlog — Refinancing Borrower, Mississauga
Client: A company refinancing its operating line · Where: Mississauga, Ontario · Engagement: 4 weeks, fixed fee
Balance reduced by$33,000
Backlog cleared3 years
CollectionsHalted
The situation — A company refinancing its operating line, Mississauga, Ontario
By the time a company refinancing its operating line in Mississauga, Ontario called, 3 years were outstanding and the CRA had assessed on estimates. Underneath it sat a bank asking for a review engagement while the file only supported a compilation.
What we did for A company refinancing its operating line, Mississauga, Ontario
We reconstructed the records year by year and separated the bookkeeping work from the assurance engagement so the independence question had one clear answer. Each filing replaced an arbitrary assessment with a real one.
The result — A company refinancing its operating line, Mississauga, Ontario
The account is current. Filing on real numbers rather than CRA estimates reduced the balance by $33,000, and a relief application addressed part of the accumulated interest.
Case Study 5 · Deadline rescue
$103,000 Late-Filing Penalty Cancelled On Relief Application — Business Preparing for Sale, Calgary
Client: A business preparing for sale · Where: Calgary, Alberta · Engagement: 7 weeks, fixed fee
Penalty cancelled$103,000
Relief applicationGranted
ReturnAccepted as filed
The situation — A business preparing for sale, Calgary, Alberta
A business preparing for sale in Calgary, Alberta had already missed one deadline and was about to miss a second. Behind it sat a prior-year restatement with no note explaining what changed, and a penalty of $103,000 was accruing.
What we did for A business preparing for sale, Calgary, Alberta
We split the work into what had to happen before the deadline and what could follow it, then prepared a due-diligence-ready statement set with supporting schedules for each material balance.
The result — A business preparing for sale, Calgary, Alberta
The outstanding return was accepted as filed, and the taxpayer relief application cancelled $103,000 of the penalty already assessed on the earlier year.
Case Study 6 · Planning that cut the bill
$67,000 Saved By Correcting What Prior Filings Had Missed — Bylaw-Audit Non-Profit, Lethbridge
Client: A not-for-profit with a bylaw audit requirement · Where: Lethbridge, Alberta · Engagement: 4 weeks, fixed fee
Saving identified$67,000
RecurringYes
Positions documentedAll
The situation — A not-for-profit with a bylaw audit requirement, Lethbridge, Alberta
A not-for-profit with a bylaw audit requirement in Lethbridge, Alberta asked for a second opinion on financial statement preparation after three years of rising tax. The review found an unusual revenue recognition policy that appeared nowhere in the basis-of-accounting note.
What we did for A not-for-profit with a bylaw audit requirement, Lethbridge, Alberta
We built the comparison first — current structure against two alternatives — and then upgraded the engagement to a CSRE 2400 review, completed the additional procedures, and delivered a package the lender accepted without conditions.
The result — A not-for-profit with a bylaw audit requirement, Lethbridge, Alberta
First-year saving of $67,000, with the same benefit recurring. Every position taken is documented and supported in the file.
Reviewed for the 2025 tax year by Udit Gupta, Founder and Tax Accountant. These case studies are illustrative worked examples composed from the CRA rules that apply to this type of work, not specific client files; figures are representative and outcomes depend on your own facts.
