The management of Prudential Tax Services for the year 2024 revamped its objectives to establish itself as a Boutique Consulting firm. Currently there are an overwhelming number of accounting and tax consulting offices on the market that offer similar services at highly fluctuating fees creating a fracture in the Accounting firms’ market.
The result of these fractures is that world recognized firms renounced the market in Sint Maarten, with examples such as Price Waterhouse & Baker Tilly Consultants. The management of PTS, in this article, outlines the specifications of the financial statements “compilation” engagement which is the most popular service catered by Accounting firms in Sint Maarten, while the clients (Taxpayers) are not aware of the serious setbacks hereof.
What is a compilation engagement?
A compilation engagement is an exercise by the Accountant to produce a financial statement that is not intended to provide an assertive or sound opinion on the financial statements or the internal controls’ effectiveness and should not be expected, speculated or understood as such by any third party. Based upon these specifications no opinion is expressed on the completeness, fairness or sustainability of the presented figures releasing the Accountant in the exercise from all legal, financial or after the fact commercial or fiscal damages related to the financial statements output by him.
What does this engagement exactly entail?
The Accountant in the exercise, in a financial statement compilation commission does not perform the following tasks:
a) Elaborate and implement administrative mechanisms to prevent or contain taxation inconveniences
b) Verify or assert on the fairness of the presented financial outcome for tax or commercial purposes
c) Take any responsibility or accountability on the correctness of the financial statements
d) Confirm the sustainability of the values presented for fixed assets, current assets, liquidities, long term or short term receivables and payables balances are accurate based upon the client’s administrative platform
e) Conduct regular tax legislation compliance scans
f) Prepare internal reports, conduct and rate compliance reviews outlined in the internal procedures, or dictate administrative standards to be followed.
g) Prepare or elaborate any management reports, budget comparisons or costs analysis on behalf of the client
h) Conduct gross margin analysis to substantiate the products’ declared gross margins
i) Detect fraud, errors, omissions, legal shortcomings or violations within the administrative and accounting platform by the client, associates or its workers.
j) Express any opinion related to the impartiality of the financial figures
The necessary firewall to protect the taxpayer before, during and after the Tax Audit becomes rocket science for the Tax Advisors due to the pre-existing accounting shortcomings while the Tax Office has the open window of success to easily target the Taxpayer.
The Accountant’s cover letter reveals your company’s weakness
The statement that all Tax Investigators mention in their Audit report is that the presented financial statements are unaudited, which brings extra weight to the Tax office’s adjustments second by the fact that the Accountant in the exercise did not exercise essential analytical studies and therefore has no evidentiary support.
It is extremely rare that a Taxpayer finishes unharmed after the fiscal authorities have launched their investigation under these conditions and therefore the decision was taken by the management of Prudential Tax Services to undergo a transformation into a more personalized form of financial assistance.
The result
The team of specialized Auditors of Prudential Tax Services are lifting the bar to improve the chances of the taxpayer during a Tax Administration Office investigation and assists the client in retaining company profits by reinforcing the administrative fractures, and recommending remedial actions to secure the longevity of business enterprising with emphasis on “cash” visibility, contemplating a Boutique Consulting firm objectives with focus to mitigate unjustified taxation.
