Understanding Financial Statements — P&L, Balance Sheet, And Cash Flow Explained With Mackisen CPA Auditors Montreal

Every successful business runs on three essential financial statements—the Profit & Loss Statement (P&L), the Balance Sheet, and the Cash Flow Statement. These documents reveal where your money comes from, how it’s used, and how financially stable your business truly is. Yet, many entrepreneurs fail to interpret them correctly, resulting in poor decisions and CRA scrutiny. Mackisen CPA Auditors Montreal helps businesses across Canada understand, prepare, and optimize their financial statements for compliance, clarity, and growth.

Legal and Regulatory Framework
Income Tax Act (Canada) Section 230(1): Requires all corporations to maintain complete financial records and supporting statements.
CRA Policy IC78-10R5: Defines proper recordkeeping standards for audit-ready financial statements.
Taxation Act (Quebec) Section 34: Mandates digital accounting records for QST, payroll, and reporting accuracy.
CPA Canada Handbook Section 1000–1500: Establishes principles for financial statement presentation and assurance.
Financial Administration Act (Quebec): Requires companies to provide accurate financial documentation during tax filings and audits.

Key Court Decisions
Beaudoin v. The Queen (2020): Reaffirmed CRA’s right to challenge inaccurate or incomplete financial statements.
Simard Beaudry Construction v. Canada (2019): Established penalties for unsubstantiated revenue or expense reporting.
Tremblay Holdings v. The Queen (2021): Demonstrated that unreliable financial statements justify reassessment.
Royal Bank v. Canada (2019): Confirmed that poor accounting disclosure affects loan eligibility.
Lincora Group v. Quebec (2019): Validated CRA’s authority to audit digital statement data.

Why CRA Targets / Issues / Enforces
CRA and Revenu Québec often focus on businesses with inconsistent or unbalanced financial statements. Missing reconciliations, unverified revenues, or discrepancies between reported income and GST/QST filings are audit triggers. Many small businesses rely on generic reports that fail to match CRA’s technical reporting standards. Mackisen CPA Auditors Montreal ensures that your financial statements align perfectly with federal and provincial compliance frameworks.

Mackisen Strategy
Data Verification — Review every transaction, expense, and entry for audit consistency.
Statement Preparation — Prepare P&L, balance sheet, and cash flow reports using CPA-approved templates.
Reconciliation — Match all bank, payroll, and GST/QST entries with statement figures.
Variance Analysis — Identify and correct reporting gaps that distort profitability.
Financial Interpretation — Translate raw data into actionable insights for decision-making.
Assurance and Audit Readiness — Ensure that every statement meets CRA and lender verification standards.

Powering Client Needs and Financial Confidence
A Montreal technology company increased investor trust after Mackisen prepared accurate P&L and balance sheet statements reflecting real profitability. A Quebec retailer improved loan eligibility by restructuring its financial statements under CPA supervision. A Toronto logistics firm reduced audit risk after Mackisen reconciled inconsistent records across multiple business accounts.
How Mackisen Clients Benefit

• CPA-certified financial statement preparation

• Clear analysis of income, expenses, and equity

• Lender and investor-ready financial packages

• CRA and Revenu Québec audit compliance

• Monthly management reporting for smarter decisions

Common Questions
Why do I need financial statements? They show your business’s health and are required for CRA compliance, bank loans, and investors.
Can I prepare statements myself? Yes, but CPA oversight ensures accuracy and compliance.
Does CRA require digital copies? Yes, all records must be retrievable and traceable.
Can Mackisen prepare audited statements? Yes, we prepare both internal and audited financial statements.
How often should I review my statements? Monthly reviews are recommended for proactive management.

Why Mackisen
Mackisen CPA Auditors Montreal provides professional financial statement preparation, interpretation, and assurance. We transform raw bookkeeping data into powerful insights that drive profitability, attract investors, and ensure CRA compliance. Book your consultation today and discover the clarity behind your numbers.