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REPORT TO

MAYOR AND COUNCIL

PRESENTED: MARCH 2, 2009 - REGULAR MEETING REPORT: 09-24


FROM: COMMUNITY DEVELOPMENT DIVISION FILE: 6750 - 01
SUBJECT: FORT LANGLEY BUSINESS IMPROVEMENT
AREA – BYLAW AMENDMENTS

RECOMMENDATION:
That Council receive this report entitled “Fort Langley Business Improvement Area – Bylaw
Amendments”, for information;
That Council receive the letter from EPR Canada Group Inc. dated February 19, 2009 for
information;
That Council receive the letter from the Fort Langley BIA requesting Council to consider a
change to the existing Downtown Fort Langley Business Improvement Area Bylaw No. 4577 for
information; and further
That Council give first, second and third reading to Downtown Fort Langley Business
Improvement Area Bylaw 2007 No. 4577 Amendment Bylaw 2009 No. 4731.

EXECUTIVE SUMMARY:
Annually, in accordance with existing Bylaw No. 4577, the Township of Langley collects a levy
totaling $50,000 on behalf of the Fort Langley BIA. Also in accordance with the same Bylaw,
the Fort Langley BIA is required to submit audited financial statements annually to Council.
Discussions among the BIA staff, Township staff and the BIA’s accounting firm and insurance
firm confirm that the annual cost to the BIA for preparation of audited financial statements can
approach $10,000, which represents 20% of the annual BIA levy. According to the BIA’s
accounting firm an Audit of the BIA’s financial statements “may be excessive given the size of
the BIA’s budget and the relatively low volume of transactions.” Thus, the Fort Langley BIA has
requested in writing that the Township amend clause 10 of the existing Bylaw No. 4577 to
reduce the annual reporting requirement from “audited” financial statements to “review
engagement” financial statements. A second amendment would amend clause 8 to change the
date from February 1 to March 1 for the annual deadline by which the Fort Langley BIA needs to
submit its current year budget for Council approval.

PURPOSE:
The purpose of this report is to ask Council to consider amending the existing Downtown Fort
Langley BIA Bylaw No. 4577 to:
1) reduce the annual reporting requirement from “audited” financial statements to
“review engagement” financial statements.
2) change the annual deadline for submitting the current year BIA budget to March 1
from the current deadline of February 1.
FORT LANGLEY BUSINESS IMPROVEMENT
AREA – BYLAW AMENDMENTS
Page 2 . . .

BACKGROUND:
A Business Improvement Area (BIA) is a designated area in a municipality where business and
commercial property owners can finance marketing, promotional and revitalization programs for
the local business district. A BIA provides the organized structure and the source of funds to
enable local business communities to improve their commercial viability.

On April 23, 2007, the Downtown Fort Langley Business Improvement Area Bylaw No. 4577
was adopted by Township Council, renewing the BIA for another five years.

DISCUSSION:
Bylaw No. 4577
The existing Bylaw No. 4577 provides for the continuation of a BIA in downtown Fort Langley
until 2012. The Bylaw defines the geographic boundary of the BIA and specifies a formula for
funding via the collection of a special property tax levy on all commercial and light industrial
properties within the specified area. Specifically, all Class 5 (Commercial) and Class 6 (Light
Industrial) properties as defined by the British Columbia Assessment Authority are included in
the BIA. The boundaries of the BIA are shown on Schedule “A” of the existing Bylaw.

In writing (see Attachment A), the Fort Langley BIA has requested that Council consider
changing Clause 10 of the existing Downtown Fort Langley Business Improvement Area Bylaw
No. 4577.

Clause 10 of the Existing Bylaw


This clause currently states:

The Association shall account for the money granted and approved by Council
for the previous year by submitting to the Township on or before March 1, in each
of the years 2007, 2008, 2009, 2010 and 2011, an annual audited financial
statement which shall be prepared in accordance with generally accepted
accounting principles and shall include a balance sheet and a Statement of
Revenue and Expenditure. The financial statement shall be prepared on a
calendar year basis.

The amended clause would state:

The Association shall account for the money granted and approved by Council
for the previous year by submitting to the Township on or before March 1, in each
of the years 2007, 2008, 2009, 2010 and 2011, an annual review engagement
financial statement which shall be prepared in accordance with generally
accepted standards for review engagements (enquiry, analytical procedures, and
discussion with management) and shall include a Balance Sheet and a
Statement of Revenue and Expenditure. The review engagement financial
statement shall be prepared on a calendar year basis.
FORT LANGLEY BUSINESS IMPROVEMENT
AREA – BYLAW AMENDMENTS
Page 3 . . .

The Rationale for Amending Clause 10:


According to the Canadian Institute of Chartered Accountants, “an auditor examines the
company’s financial records and operations to determine whether the information reported in the
financial statements is presented fairly and to express reasonable assurance whether the
financial statements are free of material misstatement.”

Also according to the Canadian Institute of Chartered Accountants, “a Review Engagement


informs the reader that a review was completed in accordance with Canadian Institute of
Chartered Accountant (CICA) standards. Although sufficient evidence was not obtained to allow
the Accountant to express an audit opinion, nothing has come to the Accountant’s attention
causing a belief that the information being reported on is not, in all material respects, in
accordance with Canadian Generally Accepted Accounting Principles.”

After conferring with its legal, accounting and insurance experts, the Fort Langley BIA has
expressed an interest to make this change for the purpose of cost saving to the BIA: Whereas
the cost of an audit can approach $10,000 (20% of the total annual BIA levy) the cost of a
review engagement is estimated at $3,000 (6% of the total annual BIA levy). Thus, if Council is
willing to make this change to the BIA Bylaw, an additional $7,000 can be used to implement the
BIA’s marketing programs rather than for reporting purposes.

The BIA’s accounting firm has sent its opinion in a letter to Mayor and Council dated February
19, 2009 (see Attachment B). In this letter, the accounting firm states:

“Although we do not perform the same level of work on a Review Engagement


that we must in an Audit, we feel that, due to the size of the budget and the
volume of transactions for the Fort Langley BIA, an Audit may be excessive. We
will still be looking at various transactions, large and small, to assure ourselves of
their accuracy.”

Also attached to this letter from the accounting firm, is the full section 8100 of the CICA
Handbook that deals with Review Engagements (see Attachment C).

Review Engagements are distinguishable from Audits in that the scope of a review is less than
that of an audit, and therefore the level of assurance provided is lower. A review consists
primarily of enquiry, analytical procedures and discussion related to information supplied to the
public accountant by the enterprise with the limited objective of assessing whether the
information being reported on is plausible within the framework of appropriate criteria. The word
"plausible" is used in the sense of appearing to be worthy of belief based on the information
obtained by the public accountant in connection with the review.

Clause 8 of the Existing Bylaw


This clause currently states:

The Association shall submit annually to Council, on or before February 1, a


budget for the purpose of the business promotion scheme set out in Schedule
“B”.
FORT LANGLEY BUSINESS IMPROVEMENT
AREA – BYLAW AMENDMENTS
Page 4 . . .

The amended clause would state:

The Association shall submit annually to Council, on or before March 1, a budget


for the purpose of the business promotion scheme set out in Schedule “B”.

The Rationale for Amending Clause 8:


This should be considered a “housecleaning amendment” that is only being brought forward for
Council’s consideration due to the request for an amendment to Clause 10. The existing Bylaw
has two separate deadlines for presenting materials to Council and by amending this clause the
dates will be brought into alignment onto the same date each year. Specifically, rather than
presenting its 2009 budget to Council by February 1, 2009 and then presenting its 2008
financial statements to Council by March 1, 2009, both documents would be required by March
1, 2009.

POLICY CONSIDERATIONS:
Authority to create and regulate Business Improvement Areas is contained in Sections 210
through 219 of the Community Charter.

FINANCIAL IMPLICATIONS:
There are no financial implications to the Township of Langley should Council endorse the
recommendations of this report and adopt the amended Bylaw.

Respectfully submitted,

Gary MacKinnon
ECONOMIC DEVELOPMENT CO-ORDINATOR
for
COMMUNITY DEVELOPMENT DIVISION

This report has been prepared in consultation with the following listed Divisions.

CONCURRENCES
Division Name
Finance Division Derrick Sparks

ATTACHMENT A Letter from Fort Langley Business Improvement


Association (received on February 20, 2009)

ATTACHMENT B Letter from EPR Canada Group Inc. dated


February 19, 2009

ATTACHMENT C Section 8100 from the CICA Handbook


Attachment B
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Attachment C
»Assurance
»Assurance Handbook
»Assurance Recommendations
»Review Engagements [Sections 8100 — 8600]
»8100 - General Review Standards

Review engagements
[Sections 8100 — 8600]

REVIEW ENGAGEMENTS
SECTION 8100
general review standards

Effective date. The Recommendations in this Section apply to review engagement reports issued
on or after January 1, 1989, except that the Recommendation in paragraph 8100.26 applies to
reports issued on or after October 1, 2003. For those public accountants who can comply with
the Recommendations in this Section, including the objective state of mind requirement (see
paragraph 8100.15), earlier implementation is encouraged.
TABLE OF CONTENTS Paragraph
Scope and definitions .01
Appropriate criteria .08
Acceptance of engagement .09
Standards applicable to review engagements .15
General standard .16
Knowledge of the entity's business .17
Review procedures .19
Documentation .23
Reporting .25
Reservations in the review engagement report .32
Other modifications to the review engagement report .41
Subsequent discovery of a misstatement .47

SCOPE AND DEFINITIONS


.01 This Section deals with reviews by public accountants of annual and interim financial statements
and other information, 1 except when the auditor of an entity reviews its unaudited interim
financial statements in the circumstances described in AUDITOR REVIEW OF INTERIM
FINANCIAL STATEMENTS, Section 7050. The use of the word "information" in the context of
information on which the public accountant reports is also intended to apply to the subject matter
of a review for compliance with agreements and regulations.
.02 Subsequent Sections provide specific guidance and should be read in conjunction with this
Section when reviewing:
(a) financial statements — annual and interim (Section 8200);

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(b) financial information other than financial statements (Section 8500);


(c) compliance with agreements and regulations (Section 8600).
.03 Review engagements do not include:
(a) compilations, without review, of unaudited financial statements or financial information (see
COMPILATION ENGAGEMENTS, Section 9200);
(b) preparation of unaudited financial statements prepared by, or with the assistance of, a
public accountant acting in the capacity of trustee in bankruptcy, receiver or liquidator;
(c) applying specified auditing procedures to financial information other than financial
statements (see REPORTS ON THE RESULTS OF APPLYING SPECIFIED AUDITING
PROCEDURES TO FINANCIAL INFORMATION OTHER THAN FINANCIAL
STATEMENTS, Section 9100).
.04 The standards and reporting requirements for reviews of financial statements included in a
prospectus or other offering document are set out in AUDITOR INVOLVEMENT WITH
OFFERING DOCUMENTS OF PUBLIC AND PRIVATE ENTITIES, Section 7110, and AUDITOR
REVIEW OF INTERIM FINANCIAL STATEMENTS, Section 7050.
.05 Reviews are distinguishable
g from audits in that the scope p of a review is less than that of an audit
and therefore the level of assurance p provided is lower. A review consists p primarilyy of enquiry,
q y,
analytical
y procedures and discussion related to information supplied
p pp to the p
public accountant by y
the enterprise
p with the limited objective
j of assessing g whether the information being g reported
p on is
plausible within the framework of appropriate
p pp p criteria. In this Section,, the word "plausible"
p is used
in the sense of appearing
pp g to be worthyy of belief based on the information obtained by the public
accountant in connection with the review.
.06 Enquiry,
q y, analytical
y procedures
p and discussion are normallyy sufficient for the p purposes
p of
considering g whether information supplied pp to the public
p accountant is p plausible in the
circumstances. However,, these p procedures are not sufficient to p provide reasonable assurance
that undetected error or fraud does not exist. A review emphasizes p enquiries
q of management,
g , the
responses
p to which the p public accountant is entitled to accept p as long g as such responses
p appear
pp
plausible. A review does not require
p q the p
public accountant to seek supporting pp g or independent
p
evidence or to study y and evaluate internal control. As a result,, the p public accountant's review will
not normally y include p procedures such as p physical
y inspection,
p , observation of client procedures,
p ,
confirmation from external p parties and examination of documents which are usually yp performed in
an audit. However,, when the p public accountant decides to p perform additional p procedures which
might
g also be carried out in an audit engagement g g ((for example,
p , when there is reason to doubt the
plausibility
p y of information obtained or when such p procedures facilitate obtaining g information), the
review engagement
g g is not converted to an audit engagement. g g The ppublic accountant's
responsibilities
p with respect to a review engagement remain as outlined in this Section and as
agreed with the client.
.07 In review engagements,
g g , it is essential that the public
p accountant not lead the reader to conclude
that an audit opinion
p is being g expressed.
p The styley of reporting
p g known as negative
g assurance is
distinguishable
g from an audit opinionp and has gained
g acceptance
p when a level of assurance
below that given
g in an audit opinion
p is being conveyed. Negative assurance is therefore
appropriate for these engagements. The negative assurance form of reporting used for review
engagements (see paragraph 8100.26(c)) informs the reader that, although sufficient evidence
has not been obtained to enable the public accountant to express an audit opinion, a review has
been completed in accordance with the standards of this Section and nothing has come to the
attention of the public accountant that causes him or her to believe that the information being
reported on is not, in all material respects, in accordance with appropriate criteria.
APPROPRIATE CRITERIA
.08 The standards set out in paragraph 8100.15 require that the public accountant perform a review
to assess whether the information being reported on is plausible within the framework of
appropriate criteria and provide negative assurance as to whether the information being reported
on is, in all material respects, in accordance with appropriate criteria. When the public accountant
is reporting on financial statements or other financial information, such criteria would be generally

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accepted accounting principles or a basis of accounting described in the notes to the financial
statements (see paragraph 8100.28). When the public accountant is reporting on compliance
with agreements or regulations, the relevant provisions of the agreement or regulations would
provide appropriate criteria. When the public accountant is reporting in other circumstances, for
example on statistical information of a non-financial nature, appropriate criteria would be
established by the terms of the engagement.
ACCEPTANCE OF ENGAGEMENT
.09 The objective of a review engagement is to add a measure of credibility to the subject matter
being reported on.
.10 i Before accepting a review engagement, the public accountant should be satisfied that:
(a) the subject matter is within the professional expertise of public accountants; and
(b) there are appropriate criteria against which the subject matter can be evaluated. [JAN.
1989 *]
.11 It is important that there be a clear understanding and agreement between the public accountant
and the client as to the nature and terms of a review engagement and it is highly desirable that
such agreement be in writing to avoid misunderstandings. 2 Information on which the public
accountant reports is the representation of management even though, in some circumstances, it
is prepared by, or with the assistance of, the public accountant. If limitations in the scope of the
review are imposed by the client, the public accountant would consider whether they are so
significant as to preclude acceptance of the engagement. The scope of the review is the
responsibility of the public accountant and not that of the client.
p
.12 When the public q
accountant is aware that an audit is required y statute or by
by y the terms of a
p
client's contract with third parties, , the client would be informed that a review will not satisfyy such
q
requirements. In these situations it may be desirable for the public accountant to suggest that the
client obtain legal advice.
.13 To avoid misunderstandings g of the terms of the review engagement, the agreement with the
client would normally specify:
p
(a) that the public accountant will conduct the review in accordance with generally accepted
standards for review engagements;
(b) the anticipated form and content of the report, including any restrictions on its use;
g g
(c) that an engagement is not intended to, and accordingly will not, result in the expression of
an audit opinion;
(d) that,, in a situation when there is a statutory or other audit requirement, the engagement will
not satisfy that requirement;
(e) that management will provide the information the public accountant requires;
g
(f) that management p
is responsible for the accuracy and completeness of the information on
which the public accountant is to report;
(g) that a review engagement cannot be relied on to prevent or detect error and fraud;
(h) that,, if the public
p accountant's association with the information being g reported
p on is to be
communicated to third parties, the public accountant's report will be attached to that
information; and
(i) that each pagep of the information being reported on will be conspicuously marked as being
unaudited.
.14 i For review engagements, the public accountant should reach an understanding and agreement
with the client as to the services to be provided. [JAN. 1989 *]
STANDARDS APPLICABLE TO REVIEW ENGAGEMENTS
.15 i Standards applicable to review engagements are as follows:

General standard
The review should be performed and the review engagement report prepared by a person or
persons having adequate technical training and proficiency in conducting reviews, with due care

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and with an objective state of mind.

Review standards
(i) The work should be adequately planned and properly executed. If assistants are employed,
they should be properly supervised.
(ii) The public accountant should possess or acquire sufficient knowledge of the business
carried on by the enterprise so that intelligent enquiry and assessment of information
obtained can be made.
(iii) The public accountant should perform a review with the limited objective of assessing
whether the information being reported on is plausible in the circumstances within the
framework of appropriate criteria. Such a review should consist of:
(a) enquiry, analytical procedures and discussion; and
(b) additional or more extensive procedures when the public accountant's knowledge of
the business carried on by the enterprise and the results of the enquiry, and
analytical procedures and discussion cause him or her to doubt the plausibility of
such information.

Reporting standards
(i) The review engagement report should indicate the scope of the review. The nature of the
review engagement should be made evident and be clearly distinguished from an audit.
(ii) The report should indicate, based on the review:
(a) whether anything has come to the public accountant's attention that causes him or
her to believe that the information being reported on is not, in all material respects,
in accordance with appropriate criteria; or
(b) that no assurance can be provided.
The report should provide an explanation of the nature of any reservations contained
therein and, if readily determinable, their effect. [JAN. 1989 *]
GENERAL STANDARD
.16 In applying the general standard the public accountant would refer to the rules of professional
conduct of the applicable provincial institute. Proficiency is attained through formal education,
training and practical experience. The reviewer needs to undergo training and obtain professional
experience in conducting reviews. Some of the skills needed in conducting reviews would be the
same as those employed in auditing. For example, skills that are employed in both types of
engagements include bringing to bear an objective and enquiring mind, applying analytical
procedures and assessing the accounting principles and disclosures of the enterprise.
KNOWLEDGE OF THE ENTITY'S BUSINESS
.17 To judge whether the information being reported on is plausible in the circumstances, the public
accountant must be in a position to assess whether the information obtained during the course of
the engagement is plausible. This requires sufficient knowledge of the enterprise and the
business in which it is involved to make intelligent enquiries and a reasonable assessment of
responses and other information obtained. It also requires a general understanding of the
manner in which the enterprise operates and an appreciation of matters that could have a
significant effect on the information being reported on. For example, when reviewing financial
statements, the public accountant would be aware of the manner of organization of the
enterprise, the nature of its assets and liabilities, the sources of its revenues and the types of its
expenses. The required knowledge would include a general understanding of the accounting
matters peculiar to the business and to the industry of which it forms part. The public accountant
may possess most of this knowledge prior to the commencement of the particular engagement
through previous involvement with this or similar enterprises, in which case only limited enquiries
would be needed to update such knowledge. The public accountant's objective can normally be
achieved with a less detailed knowledge of the business than is required in an audit.
.18 The public accountant, in determining the plausibility of the information being reported on needs

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to consider information obtained during previous engagements. When the review is undertaken by the
enterprise's auditor, consideration would have to be given to knowledge obtained as auditor
concerning the business carried on by the enterprise, the industry of which it forms part and its
internal control.
REVIEW PROCEDURES
.19 A review consists primarily of:
(a) making g enquiries
q concerning g financial,, operating,
p g, contractual and other information,, and
considering g responses
p that,, in addition to oral responses, may take the form of listings,
schedules or other documents;
and
pp y g analytical
(b) applying y p
procedures p
such as comparing g the current and prior
p p
period information
and considering g the reasonableness of financial and other inter-relationships. p Analytical
y
p
procedures p
performed during g a review engagement
g g would normallyy be less extensive than
y
analytical p
procedures p
performed duringg an audit. Explanations
p p and
for relationships
pp
individual items that appear to be unusual would be obtained byy directing g enquiries
q to
pp p
appropriate p
personnel p
of the enterprise, , the responses
p p
to which the public accountant is
p without examination of supporting evidence as long as such responses
entitled to accept
appear plausible;
(c) having g discussions with appropriate
pp p officials of the enterprise concerning information
received and the information being reported on.
Examplesp of enquiry, analytical procedures and discussion are set out in the following specific
situations:
(i) financial statements, paragraph 8200.23;
(ii) financial information other than financial statements, paragraph 8500.04; and
(iii) compliance with agreements and regulations, paragraph 8600.02.
.20 When the public p accountant doubts the p y of the information being
plausibility g reported
p on,, sufficient
p
additional or more extensive procedures would be carried out to resolve such doubt or confirm
that a reservation is required (see paragraph 8100.34).
.21 The enterprise may use assumptions and estimates, the plausibility of which may be difficult for
the public accountant to assess. Such assumptions and estimates may be used, for example,
when it is not feasible or economical for the enterprise to do or require as much work at an
interim financial statement date as at a year-end date. In these circumstances, the public
accountant would consider whether available information establishes the plausibility of such
assumptions and estimates. On occasion, the public accountant may be unable to determine the
plausibility of these assumptions and estimates. In such cases, consideration would be given to
the need to report with reservation (see paragraph 8100.34).
.22 There is a greater risk that misstatements will not be detected in a review than in an audit. When
considering the effect of a misstatement, the measurement of what is material is made by
reference to the information the public accountant is reporting on, not the level of assurance
being given.
DOCUMENTATION
.23 Matters that in the public accountant's professional judgment are important to support the content
of the report would be documented. Supporting working papers would describe the procedures
undertaken and any unusual matters considered during the performance of the review, including
the disposition of such matters. A checklist is one form of providing a record of work done and
may be helpful in avoiding omission of important procedures, making efficient use of time and
developing consistent approaches to similar engagements.
.24 i The public accountant should document matters that in his or her professional judgment are
important to support the content of the report. [JAN. 1989 *]
REPORTING
.25 i Negative assurance reporting should be used only when the standards set out in paragraph
8100.15 have been met. [JAN. 1989 *]

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.26 i The public accountant's communication relating to a review engagement should be entitled
"Review Engagement Report" and should:
(a) in a scope paragraph:
(i) specifically identify the subject matter reported on; and
(ii) state that the review was made in accordance with Canadian generally accepted
standards for review engagements and, accordingly, consisted primarily of enquiry,
analytical procedures and discussion related to information supplied by the
enterprise;
(b) in a disclaimer paragraph, state that the review does not constitute an audit and disclaim
an audit opinion; and
(c) in a negative assurance paragraph, except when reservations are required:
(i) follow the guidance in paragraph 8100.28 when reporting on financial statements;
(ii) state, when reporting on other financial information, that, based on the review,
nothing has come to the public accountant's attention that causes him or her to
believe that the information is not, in all material respects, in accordance with a
disclosed basis of accounting; or
(iii) state, when reporting on non-financial information, that, based on the review, nothing
has come to the public accountant's attention that causes him or her to believe that
the information is not, in all material respects, in accordance (or does not comply)
with (indicate appropriate criteria). [OCT. 1, 2003 *]
.27 i Each page of the information on which the public accountant reports should be conspicuously
marked as being unaudited. [JAN. 1989 *]
.28 The negative assurance paragraph of the public accountant's report on financial statements
would state that nothing has come to the public accountant's attention that causes him or her to
believe that the information is not, in all material respects, in accordance with:
(a) Canadian generally accepted accounting principles, when the financial statements are
prepared for general purposes; or
(b) the basis of accounting described in the notes to the financial statements, only when the
financial statements are prepared:
(i) in accordance with regulatory or legislative requirements to meet the specific needs
of a regulator or a legislator; 3 or
(ii) in accordance with written contractual requirements such as may be set out in trust
indentures or buy / sell agreements.
.29 Uniformity in the form of the review engagement report is desirable because it encourages a
consistent approach and assists the reader by identifying and highlighting unusual
circumstances. It is suggested that a review engagement report without reservation take the form
illustrated in:
(a) PUBLIC ACCOUNTANT'S REVIEW OF FINANCIAL STATEMENTS, paragraph 8200.42,
and Examples A and B of Appendix B, for financial statements;
(b) REVIEWS OF FINANCIAL INFORMATION OTHER THAN FINANCIAL STATEMENTS,
paragraph 8500.06, for financial information other than financial statements;
(c) REVIEWS OF COMPLIANCE WITH AGREEMENTS AND REGULATIONS, paragraph
8600.04, for compliance with agreements and regulations.
.30 The date of substantial completion of the review would be used as the date of the review
engagement report. This can be described as the date by which the public accountant has
performed sufficient procedures to support the content of the report.
.31 The terms of certain review engagements may require the public accountant to carry out work in
addition to that required to complete the review. This work might include, for example, an
examination of certain items within financial statements and the issuance of a special report with
respect to those items. To avoid confusion, the results of the additional work would normally be
the subject of a separate report (see SPECIAL REPORTS, Sections 5800 to 5815).

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Reservations in the review engagement report


.32 The term "reservation in the review engagement report" is used when the public accountant:
(a) expresses negative assurance with a qualification with respect to a departure from
appropriate criteria or with respect to an inability to complete the review;
(b) expresses an adverse statement that the information is not presented in accordance with
appropriate criteria; or
(c) is unable to express any assurance on the information because of an inability to complete
the review.
.33 When changes have been made in the application of generally accepted accounting principles or
other appropriate criteria and such changes are not adequately disclosed in the information being
reported on, this would represent a departure from appropriate criteria and the public accountant
would express a reservation.
.34 i A reservation should be expressed in the review engagement report when the public
accountant:
(a) is unable to complete the review because there is a lack of information or because it is
impractical to obtain satisfactory information, and is thus unable to decide whether some
or all of the information being reported on is plausible within the framework of appropriate
criteria;
(b) concludes that there is a departure from the appropriate criteria; or
(c) concludes that any significant interpretations of provisions of an agreement or regulation
referred to in the report are not appropriate or reasonable. [JAN. 1989 *]
.35 In deciding which type of reservation (paragraph 8100.32) is appropriate, the public accountant
needs to consider, in addition to materiality:
(a) the degree to which the matter impairs the usefulness of the information;
(b) the extent to which the effects of the matter on the information can be determined;
(c) the extent to which the effects on the information can be related to specific items; and
(d) whether the information is or may be misleading even when read in conjunction with the
review engagement report.
.36 When a reservation is required, the review engagement report would be qualified unless the
public accountant concludes:
(a) that departures from the appropriate criteria render the information misleading or virtually
useless even when read in conjunction with the report, in which case an adverse report
would be provided; or
(b) in circumstances when the public accountant is unable to complete the review, that the
limitation in scope is such that the effect on the information of possible departures from the
appropriate criteria could be so pervasive or significant that there is no basis for
expressing any assurance on the information, in which case a denial of assurance would
be provided.
.37 i When the public accountant concludes that a reservation in the review engagement report is
necessary, the report should draw attention to the reservation as follows:
(a) the reservation paragraph should immediately precede the negative assurance paragraph;
(b) the negative assurance paragraph should include:
(i) wording appropriate for the type of reservation; and
(ii) a reference to the reservation paragraph; and
(c) in addition, when the reservation results from an inability to complete the review, the scope
paragraph should contain a reference to the reservation paragraph. [JAN. 1989 *]
.38 The reservation paragraph needs to be worded so that it does not imply that the public
accountant has verified the matter giving rise to the reservation or determined that the
information, in any other respects, is in accordance with the appropriate criteria.
.39 i When a reservation is expressed in the review engagement report, the public accountant

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should:
(a) include all reservations known to him or her as a result of the review;
(b) describe the reasons for each reservation; and
(c) indicate how and, when readily determinable, the extent to which the information being
reported on is affected by a departure from the appropriate criteria. If the effects are not
readily determinable, the public accountant is not obliged to determine them but should
indicate in the review engagement report that the effects have not been determined. [JAN.
1989 *]
.40 If the client will not accept the review engagement report containing the reservation, the public
accountant would refuse to be further associated with the engagement. In these circumstances,
the public accountant would:
(a) write to the client advising why the engagement cannot be continued; and
(b) consider whether it is appropriate to continue the relationship with the client.
Other modifications to the review engagement report
.41 i When comparative figures:
(a) are based on information reported on by another public accountant; or
(b) were neither audited nor reviewed,
and disclosure of such matters is not made in the information on which the public accountant
reports, disclosure should be made in a separate and final paragraph of the review engagement
report. [JAN. 1989 *]
.42 When comparative figures are included and a reservation has been expressed in the auditor's
report or the public accountant's review engagement report for the preceding period, it may be
appropriate to make reference to the reservation in the review engagement report for the current
period. Such a reference, however, would not normally be appropriate when the matter giving
rise to the reservation has subsequently been settled and does not impair the comparability of
the current and comparative figures. When it is appropriate to refer to a reservation of the
preceding period, the reference is best included as a separate paragraph following the negative
assurance paragraph. However, if the reservation still exists and affects the information of the
current period, it would be dealt with as outlined in paragraph 8100.34.
.43 The review engagement report would normally be addressed to the person engaging the public
accountant. When it is addressed other than to the client, it may be appropriate to indicate who
has engaged the public accountant, by such words as:
"At the request of Client Limited, I have reviewed ........"
.44 In certain circumstances, such as when reporting on financial information other than financial
statements, the public accountant may wish to indicate in a final paragraph of the review
engagement report, its purpose or any restrictions on its use, by such words as:
"This report is intended to be used solely for (indicate specific use) and is not to be
referred to or distributed to any person not a member of management of Client Limited or
(name of person to whom the report is addressed)."
.45 Public accountants sometimes include in their review engagement reports other information and
explanations that could be interpreted as a reservation, although none is intended. Usually, such
information and explanations would be more appropriately disclosed in the information being
reviewed. When the public accountant makes comments of this nature, the comments would be
expressed in such a way that they would not be confused with a reservation.
.46 i If the public accountant expands the review engagement report to include information and
explanations not intended as a reservation, the additional information and explanations should
follow the negative assurance paragraph. [JAN. 1989 *]
Subsequent discovery of a misstatement
.47 If, after the release of the review engagement report, the public accountant becomes aware of a
possible misstatement that might have affected such report had the public accountant known
about it, the matter would be discussed with management as soon as possible. When there are

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differences between management and the public accountant with respect to such matters as the
existence of a misstatement or informing users of the report of a misstatement, and the public
accountant does not believe that such matters have been dealt with appropriately, consideration
would be given to seeking legal advice as to the action to be taken to discharge the public
accountant's responsibilities. When revised information is to be issued and the misstatement is of
an isolated nature, the public accountant's procedures may be confined to the misstatement and
the revised report double dated. However, if the misstatement is so pervasive that it casts doubt
on the results of the review as a whole, the public accountant would re-open the review and
issue a new report with a new date. When information which has been reported on is revised
because of a misstatement, the review engagement report on the revised information would be
clearly differentiated from the original report by stating, in a separate paragraph of the new report
following the negative assurance paragraph, that the previous report dated .......... has been
withdrawn and that the information has been revised. This paragraph would also include either
an explanation of the revision or a cross-reference to a note to the information explaining the
revision.

Footnotes

1. Pending further study, this Section does not apply to reviews of future-oriented financial information.

* See explanation of effective date at the beginning of this Section.

2. For an example of an engagement letter for a review of financial statements, see PUBLIC
ACCOUNTANT'S REVIEW OF FINANCIAL STATEMENTS, Section 8200, Appendix A.

* See explanation of effective date at the beginning of this Section.

* See explanation of effective date at the beginning of this Section.

* See explanation of effective date at the beginning of this Section.

* See explanation of effective date at the beginning of this Section.

* See explanation of effective date at the beginning of this Section.

* See explanation of effective date at the beginning of this Section.

3. Such financial statements are considered to meet the specific needs of a regulator or a legislator
notwithstanding that the financial statements may be placed on the public record. For the purposes of this
Section, non-consolidated financial statements prepared for income tax purposes are considered to be
financial statements prepared in accordance with regulatory or legislative requirements.

* See explanation of effective date at the beginning of this Section.

* See explanation of effective date at the beginning of this Section.

* See explanation of effective date at the beginning of this Section.

* See explanation of effective date at the beginning of this Section.

* See explanation of effective date at the beginning of this Section.

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THE CORPORATION OF THE TOWNSHIP OF LANGLEY

DOWNTOWN FORT LANGLEY BUSINESS IMPROVEMENT AREA


BYLAW 2007 NO. 4577 AMENDMENT BYLAW 2009 NO. 4731

EXPLANATORY NOTE

Bylaw No. 4731 amends Downtown Fort Langley Business Improvement Area Bylaw 2007
No. 4577 by amending the date in Section 8 and amending Section 10 to require that a
review engagement statement rather than an audited financial statement be submitted
annually.
THE CORPORATION OF THE TOWNSHIP OF LANGLEY

DOWNTOWN FORT LANGLEY BUSINESS IMPROVEMENT AREA


BYLAW 2007 NO. 4577 AMENDMENT BYLAW 2009 NO. 4731

WHEREAS it is deemed desirable to amend the Downtown Fort Langley Business


Improvement Area Bylaw 2007 No. 4577;

NOW THEREFORE, the Municipal Council of the Corporation of the Township of Langley, in
Open Meeting Assembled, ENACTS AS FOLLOWS:

1. This bylaw may be cited for all purposes as “Downtown Fort Langley Business
Improvement Area Bylaw 2007 No. 4577 Amendment Bylaw 2009 No. 4731”.

2. Bylaw No. 4731 hereby amends the Downtown Fort Langley Business Improvement
Area Bylaw 2007 No. 4577 by:

2.1 Amending Section 8 by deleting the date of “February 1” and inserting


“March 1” to read as follows:

8. The Association shall submit annually to Council, on or before March 1, a


budget for the purpose of the business promotion scheme set out in
Schedule “B”.

2.2 Deleting Clause 10 in its entirety and replacing it with:

10. The Association shall account for the money granted and approved by
Council for the previous year by submitting to the Township on or before
March 1, in each of the years 2007, 2008, 2009, 2010 and 2011, an
annual review engagement financial statement which shall be prepared in
accordance with generally accepted standards for review engagements
(enquiry, analytical procedures, and discussion with management) and
shall include a Balance Sheet and a Statement of Revenue and
Expenditure. The review engagement financial statement shall be
prepared on a calendar year basis.

READ A FIRST TIME the day of


2009.
READ A SECOND TIME the day of
2009.
READ A THIRD TIME the day of
2009.
RECONSIDERED AND ADOPTED the day of
2009.

Mayor Deputy Township Clerk