Accounting and accounting rules in Canada

Accounting Rules

Tax Year

The tax year typically begins on 1 January and finishes on 31 December of the same year.

A company may also choose to establish a tax year of 12 consecutive months starting on the date the company started its activities. For example: from 1 June to 31 May. A taxation year may not exceed 53 weeks. Once selected, the tax year cannot be changed without approval from the tax authorities.

Accounting Standards

Canadian GAAP requires a publically accountable enterprise to use IFRS. A non-publically accountable enterprise may use IFRS or Accounting Standards for Private Enterprises.

The Accounting Standards Board of the Canadian Institute of Chartered Accountants (AcSB) establishes accounting and financial information standards.

Accounting Regulation Bodies

Canadian Accounting Standards Board

Accounting Reports

Financial accounts in Canada usually include a balance sheet, a profit and loss account, a statement of retained earnings and a cash flow statement.

Balance sheet: 12 pre-determined consecutive months;
1) Assets
2) Liabilities
3) Shareholder balance

Publication Requirements

The recommendations in the CPA handbook apply to all Canadian companies. Specific regulations apply to banks, insurance companies and public organisations.

Reporting of financial statements and balance sheets must be done yearly. Companies listed on the stock exchange must provide quarterly financial reports.

Professional Accountancy Bodies

CICA , Chartered Professional Accountants of Canada
CPAB , Canadian Public Accountability Board

Certification and Auditing

Companies have to seek a statutory auditor to conduct an annual audit of the financial health of their organisation.

You can contact an external auditor such as Deloitte or KPMG.

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