Accounting advisory

Services beyond the audit

Contents
Solutions for a changing accounting landscape ................................ 1
Complex accounting advisory ........................................................... 3
Transaction advisory ......................................................................... 4
Finance ............................................................................................ 5
Actuarial and insurance .................................................................... 6
Finance analytics .............................................................................. 7
Contacts .......................................................................................... 8

ii Accounting advisory Services beyond the audit

Solutions for a changing
accounting landscape
It’s important for today’s businesses to realize that auditors do much
more than sign audit opinions. Maybe it’s true with some firms, but
at Deloitte, our accounting advisory practice offers a range of services
to meet the complex and evolving accounting challenges you face
on multiple fronts. These include the heightened expectations of
management, investors, regulators and other stakeholders; increasingly
complex financial reporting and accounting standards; transaction
and transformation issues associated with mergers, acquisitions and
divestitures; and a shortage of qualified finance resources and talent.

Accounting advisory Services beyond the audit 1

 O
ptimizing the efficiency and effectiveness of

Optimizing the efficiency their accounting and finance functions means

that, more than ever, organizations must augment

and effectiveness of their capabilities with external knowledge and experience

in areas like complex accounting advisory, transaction

their accounting and finance advisory, finance, actuarial and insurance, and finance
analytics. With targeted services in all five of these practice

functions means that, more areas, the Deloitte accounting advisory practice can
help you:

than ever, organizations must • Apply appropriate expertise and experience to

augment their capabilities accounting and reporting matters, as needed

• Achieve greater reliability in financial reporting

with external knowledge and • Manage risk to effectively avoid or quickly handle last
minute surprises

experience in areas like • Accelerate your financial reporting calendar, providing

investors with more timely information

complex accounting advisory, • Evaluate the quality and requirements of M&A

opportunities

transaction advisory, finance, • Enhance your ability to meet or accelerate transaction

timelines

actuarial and insurance, and • Streamline the finance function following a transaction
or restructuring

finance analytics. Don’t place unnecessary limits on the value your auditor
can provide. With Deloitte, you can leverage a full range
of accounting advisory services to enhance your audit
services, extend your internal capabilities and address
specific issues as they arise.

2 Accounting advisory Services beyond the audit

Complex accounting
advisory

A
s regulations multiply, the advanced accounting
capabilities that enable strong, effective reporting Case study
are more critical than ever, but today’s lean
finance functions are contending with shortages of both
resources and talent. In this challenging environment, it’s New revenue recognition requirements
important to leverage the right advice when addressing a A large telecommunications company with multiple
range of increasingly complex accounting areas, including business units, contract types and product offerings
financial statement preparation, regulations and standards, needed assistance in scaling the implementation
valuation, financial instruments and transaction-related effort of the proposed revenue recognition standards.
accounting. Deloitte’s complex accounting and advisory The goal was to develop an early estimate of the
team has the knowledge and experience to help in all impact the standards would have on the company’s
these areas and more. financial statements.

We also offer a broad range of accounting framework Applying deep industry experience, capabilities
conversion services. While in recent years, IFRS conversion from all required areas (including IT) and a keen
has been top-of-mind, our conversion team leverages local understanding of the IASB exposure drafts, Deloitte
and global specialists in accounting, tax, valuation and completed the initial revenue recognition readiness
finance transformation to efficiently plan and implement effort. This focused on pinpointing accounting,
conversions between all types of accounting frameworks. system and process issues, developing a work plan,
This includes IFRS, other local GAAPs (including U.S. formalizing business unit accountability, educating
GAAP), PSAS and ASPE. Our experience includes large constituents and building support for resource
multi-national clients across a broad array of industries needs. Additional support included the development
and sectors, as well as private companies and small to of transaction scenarios as well as the business
mid-sized entities. Specifically, our services include: and functional requirements needed to support IT
changes. The team also performed an extensive
• Understanding the impact of accounting standards contract review to assess revenue recognition impacts
on your business (interpretation of new standards or on existing contracts.
changes to existing standards)
• Dealing with dual or multi-GAAP reporting environment With a new revenue recognition standard on
requirements the way from the IASB, having the resources and
• Reaching accounting positions that support high-quality experience needed for successful implementation
financial reporting is critical.
• Understanding and practically applying financial
instruments accounting Projects may be complex and multi-year, so a
• Dealing with the complexities of tax accounting, complete understanding of required work and
particularly those related to deferred tax and uncertain relevant timeframes significantly simplifies and
tax positions expedites the path to compliance.
• Providing training in accounting and financial reporting
on complex topics such as consolidation, financial
instruments, revenue recognition, employee benefits,
tax accounting and share-based payments

Accounting advisory Services beyond the audit 3

Transaction advisory

E
xecuting transactions has become significantly
more complex in recent years, with regulations Case study
and requirements evolving rapidly. Deloitte helps
clients navigate these complexities, specializing in M&A
transactions, both buy and sell side; capital-raising Cross-border M&A activity
activities; IPOs; high-yield debt offerings; private placement A company that filed under IFRS acquired a company
offerings in the U.S. and Canada; and secondary offerings. that reported under U.S. GAAP, meaning a GAAP
Our professionals are fluent in the regulatory requirements conversion project had to be undertaken and post-
of key global markets and can assist clients with cross- acquisition regulatory filings prepared.
border transactions and listings, as well as assessing and
fulfilling their post-transaction reporting requirements. The Deloitte project team completed the GAAP
conversion in addition to preparing the pro forma
Our transaction advisory team can help with challenges financial information for inclusion in a regulatory filing.
such as: The team analyzed the variances in the accounting
policies adopted by both companies and uncovered
M&A due diligence support the key differences. They also provided the company’s
• Assessing the impact of accounting on the quality of management team with the technical insight needed
earnings, cash flows and asset realization to fully understand the variances between IFRS and
• Analyzing complex transactions and accounting policies U.S. GAAP, along with practical solutions on how
to identify pricing-related issues and opportunities to approach the differences. Deloitte also shared
• Managing the implications of financial reporting and observations and feedback with management based
disclosure on its review of the prepared pro forma financial
information.
M&A integration
• Analyzing complex integration issues such as With cross-border transaction specialists from all
restructuring and employee compensation relevant countries working on the project, the client
• Assisting with accounting policy selection, conversions was able to execute and close on the transaction
and convergence without risking or incurring any regulatory delays.
• Consolidating and harmonizing reporting

Divestiture transactions
• Assisting with sale accounting, assets held for sale
and/or discontinued operations, restructuring costs,
employee terminations, stock-based compensation, etc.
• Preparing or providing assurance over carve-out and/or
pro-forma financial statements
• Assisting with complex divestiture disclosure
requirements

IPO readiness assessments and execution

• Assessing IPO readiness, strategic priorities and
potential areas for improvement
• Preparing and executing a detailed action plan

4 Accounting advisory Services beyond the audit

Finance

G
iven the limited resources available to today’s
finance functions and the continued broadening Case study
of their role, the need for increased efficiencies is
challenging businesses around the world. Deloitte helps
CFOs and finance teams become more efficient, both as Reducing time to close
individuals and as key components in the organization’s Deloitte was working with a company that wanted
larger structure. From fulfilling financial stewardship to reduce the time spent on its year-end financial
duties and working more productively with operations, reporting process by 50% and reduce the time
to assisting in strategic decision-making, we help finance required for the financial close and earnings release.
realize the full extent of its role in the modern enterprise.
Our professionals undertook a full assessment of their
Deloitte can access a full range of global experience to options for meeting “fast close” requirements. After
help you: examining the overall process, the team suggested
a number of reconciliation, complex accounting and
• Rationalize statutory reporting costs and reduce judgment strategies for making the reporting effort
compliance risks by leveraging software solutions more effective and efficient. We also suggested a
• Use a focused and scalable mechanism to deliver insights software solution to increase the speed of the overall
on your financial reporting process, concentrating close process and helped client IT teams with related
on the key value drivers and enablers specific to the integration and automation.
organization
• Establish the finance strategy and vision and evolve the As a result, the company achieved a smoother and
strategy as stability increases more predictable close process; reduced overtime;
• Design and implement changes to processes and systems freed resources to work on more important projects;
• Design and implement the future close process and increased the speed of access to strengthened
• Increase the finance and business functions’ focus on information. This not only led to a more efficient
the close overall reporting process, but their faster close
capabilities now present a positive, confident picture
to stakeholders.

Deloitte provides insights

and solutions driven by
broad and deep expertise,
empowering success through
efficiency of business
processes, operating models
and fully leveraged
management information.

Accounting advisory Services beyond the audit 5

Actuarial and insurance

A
ctuaries play important roles in many areas of the
financial services industry, including life insurance, Case study
property & casualty (P&C) insurance and pensions.
The Deloitte actuarial and insurance practice offers a range
of services that leverage financial and statistical theories to De-risking the pension plan
solve real business problems. These problems are typically A multi-national manufacturing company with a very
related to the nature, timing or likelihood of future large pension plan specifically wanted to reduce its
financial events and their impacts. Deloitte can leverage exposure to longevity risk.
the largest global insurance actuarial team among the Big
4, with deep knowledge and experience in subjects such Deloitte reviewed the position of the pension plan and
as ERM, Solvency II and IFRS 4 Phase 2. Depending on quantified the longevity risk based on the experience
the engagement, we can also bring in Deloitte specialists of the plan and the wider pension industry. Our
from a full range of related financial advisory services. As analysis indicated that a longevity swap would be the
a core competency, our team works closely with all areas best option. We provided advice on structuring the
of the firm. For example, it assists auditors in determining swap transaction as well as support on all aspects
if the reserves (liabilities) shown on the balance sheet with of the project, including modeling expertise, pricing
respect to P&C insurance, life insurance and the pension advice, actuarial resources/guidance, regulatory
plan are appropriate. Our actuarial and insurance team insight, tax advice, accounting advice and operational
can also help your organization: due diligence. Further, our market knowledge
delivered insight into industry best practices and risk
• Design a new pension plan or de-risk an existing one management. To this end, we reviewed the plan’s
• Ensure an appropriate value is placed on the pension operational and risk policies in relation to the swap
liability being assumed during M&A transactions treaty, specifically the sequencing of the risk mitigation
• Develop new actuarial models for calculating reserves tools in the event that the swap counterparty
• Improve efficiencies for actuarial reserve calculation became insolvent.
processes
• Undertake a peer review of your appointed actuary’s The longevity swap was entered into with a strong
work for governance purposes counterparty, reducing the longevity risk in the plan
• Help develop organizational understanding and and consequently lowering the liability value. The
supporting systems for insurance companies preparing overall review of risk and operational policies provided
for IFRS 4 Phase 2 in 2018 assurance to the regulator that the deal would retain
adequate protection for the policyholder. Our analysis
also provided the sponsoring company’s board with
comfort that the deal would not negatively impact
expected future contributions.

6 Accounting advisory Services beyond the audit

Finance analytics

O
rganizations are generating and accumulating
data at an unheard of pace, data that represents Case study
an important, but relatively untapped, strategic
asset. Deloitte can help you improve process efficiencies
to better utilize data and improve the quality and usability Improving budgeting and forecasting
of outputs. Reporting and close processes remain largely A department of a large regional municipality was
manual, arduous and time consuming while information struggling with its budgeting and forecasting process.
access and visibility are often poor, resulting in a risk of To produce their annual operating budget for
inconsistent or unreliable conclusions. Deloitte finance approval, the department needed to pull together
analytics professionals combine systems and data 19 separate Excel files, update and reconcile each and
experience; strong knowledge of regulatory requirements; address manually generated formula errors and data
experience in the needs of accounting and finance entry mistakes. Using only Excel, which lacks the
functions; and a deep understanding of clients’ business, deep data exploratory capabilities to conduct
process and operating environments to help develop comparative analyses or create accurate forecasts,
end-to-end solutions to data-related finance challenges. they were also finding it difficult to obtain the right
information in a timely manner to make informed
We help organizations to: business decisions. As a result, their process was
• Improve the quality of internal reporting to management drawn out over several days, and they looked to
through analytic and visualization techniques, enabling Deloitte to develop a solution.
better insights and decision-making
• Accelerate and automate a range of finance processes, Following a top to bottom assessment of the
leading to a faster, more efficient close department’s processes and current technology,
• Organize and extract data for analysis of specific business Deloitte delivered a comprehensive solution, including
areas and represent it visually recommended software to help improve processes
• Improve audit risk identification processes through close and enhance the budget reporting model. As part of
analysis of unusual data relationships the solution, Deloitte implemented the new software1
and imported the required data, designed the master
budgeting module, created customized visual reports
and dashboards to drive real-time decision making,
Organizations are automated certain functions and trained staff on the
new system.
generating and accumulating
With the solution in place, the department was able
data at an unheard of pace, to drastically improve the efficiency of their budgeting
cycle, gain comfort on the reliability of information
data that represents an used in the process and improve their ability to use
the data to support business decisions.
important, but relatively
untapped, strategic asset.

1 Prohibited service for an audit client. Accounting advisory Services beyond the audit 7
Contacts

Your auditor is there for you every year at audit

time, but we can also become an extension of your
finance function when key finance issues and challenges
emerge – as an advisor only or augmenting audit services
where independence guidelines permit.

For more information on how Deloitte accounting advisory

professionals can help your organization, please contact:

Advisory Services Leader Finance

Mark Wayland Loraine McIntosh
mawayland@deloitte.ca lmcintosh@deloitte.ca
416-601-6074 416-601-6233

Complex Accounting Actuarial

Advisory and Insurance
Sean Morrison Warren Rodericks
seamorrison@deloitte.ca wrodericks@deloitte.ca
416-601-6296 416-874-4442

Transaction Advisory Finance Analytics

David Dalziel Chris Thatcher
ddalziel@deloitte.ca chthatcher@deloitte.ca
416-601-6298 416-601-6576

8 Accounting advisory Services beyond the audit

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