RISK ADVISORY SERVICES

REAL ESTATE AND

CONSTRUCTION
Real estate and construction | BDO 2
IN A SUSCEPTIBLE INDUSTRY LIKE
REAL ESTATE AND CONSTRUCTION,
IT IS IMPORTANT TO PRACTICE
CAUTION WHILE GRASPING THE
OPPORTUNITIES.
As economic and nancial challenges weigh on, you have probably
found it increasingly difcult to locate enough monetary support
to help sustain your organization. Changes to taxes, along with
regulatory requirements, create further complications where
customers want new solutions and products that both address
environmental concerns and outshine any potential competition.
Jobs in the real estate and construction industry are currently
facing hardships. Real estate investment trusts, mortgage
investments corporations, as well as other nancial and tax
opportunities are being developed more thoroughly than before,
while limited partnership and private trust structures are becoming
more complex.
Our real estate and construction practice
BDO provides a full range of services tailored to help organizations
address their changing needs in key segments of the real estate and
construction industry. We offer a personalized approach combined
with quality service, accessibility and commitment to our clients.
For decades, our more than 100 dedicated real estate and
construction partners and professionals have helped over 8,000
clients in Canada and many more internationally. We understand
the issues that our real estate and construction clients are facing,
including the importance of seeking practical advice that is backed
by years of experience.
Real estate and construction | BDO 3
Risk in real estate
Taking proactive measures and outlining all of the risk factors
facing real-estate organizations can allow risks to be turned into
opportunities for improvement and success. The BDO Risk Advisory
Services (RAS) Team is part of a dedicated national practice
committed to helping real estate organizations understand and
assess the risks inherent to their businesses. Our approach to
risk mitigation combines talent, experience and an exceptionally
motivated team to provide clients like you with innovative,
cost-effective and value-added services that make a difference.
Our RAS practice offers a combination of services designed to
address the real estate and construction industry. From enterprise-
wide risk initiatives and corporate governance programs to
specic niche service solutions, our team can work with you to
create strategic, practical and effective processes to minimize
organizational risks and maximize business opportunities.
Service auditors reports
Service auditors reports (SARs) can be especially useful in
the real estate and construction industry. They are designed
to provide information and assurance about controls within a
service organization (e.g. real estate corporations, REITs) to user
organizations (e.g. property management rm, management
organization) and their auditors. They also aim to help stakeholders
gain an understanding of the internal controls placed in operation at
the service organization regarding its controls involved in executing
its nancial services for the user organization.
Some additional benets of SARs include:
Minimizing the need to deal with client auditors
Reducing client audit fees by reducing the effort of the external
auditors
Ensuring that the services being outsourced are managed properly
Clarifying the internal control processes in place at the service
organization
Identifying efciency issues as well as duplicate controls
The service auditors report focuses on the controls involved in
processing nancial transactions by a service organization, and are
conducted in accordance with CICA Handbook Section 5970 issued
by the Canadian Institute of Chartered Accountants or SAS 70
issued by the American Institute of Certied Public Accountants.
There are two types of each style (S5970 / SAS70) of report:
Type I is a report on the controls placed in operation as at a
specic date
Type II is a report on the controls placed in operation and tests of
the operational effectiveness of controls during a specied period
of time
For decades, our more than 100 dedicated real estate and
construction partners and professionals have helped over 8,000
clients in Canada and many more internationally. We understand
the issues that our real estate and construction clients are facing,
including the importance of seeking practical advice that is backed
by years of experience.
Real estate and construction | BDO 4
Enterprise risk management
Calculated, carefully-determined risks are instrumental in helping
an organization grow and ourish. However, business risks that stem
from technological, environmental, political and commercial factors
could threaten the viability and protability of an organization.
A solid enterprise risk management (ERM) plan can help you take
strategic, premeditated risks to help your organization reach new
heights, while managing the numerous threats and risks that can
impede organizational growth. It can also help you maximize
organizational opportunities, while mitigating and managing the
inherent risks to your business and industry. This can help you
survive hardship and remain operational, functional and viable.
Our RAS professionals will work with you to strategically, tactically
and critically think outside the box. Together, we can create a unique
and innovative ERM program that will meet your strategic business
needs, while weaving a culture of risk understanding and awareness
into your organizational fabric. We offer considerable insight and
experience across all aspects of the real estate and construction
industry from investment vehicles to developers and associated
support services. By understanding the challenges our clients face,
we are more proactive in delivering relevant, focused and practical
advice for their businesses.
At BDO, our audit and risk advisory services show real estate
and construction companies how and where they can improve
productivity through efcient business processes and cost controls.
Internal audit services
Growing businesses must move swiftly in order to take advantage
of their opportunities, while simultaneously assuring themselves,
their shareholders, lending institutions and legislature that their
internal processes and controls are secure and compliant with strict
regulatory environment rules.
Our audit services include:
Strategic partnering and co-sourcing
IA function set-up
Quality assurance review
Technology, risk and security
As technology continually changes, so do the underlying risks of
these new advancements. A companys information technology is a
strategic asset that needs to be managed effectively and efciently.
Our information technology (IT) services include:
Enterprise security
Business continuity and disaster recovery
IT controls design and evaluation
Data management services
IT governance
IT assurance
At BDO, our audit and risk advisory services show
real estate and construction companies how and
where they can improve productivity through
efcient business processes and cost controls.
Real estate and construction | BDO 5
Business process improvement
In a very competitive market with a shortage of labour and ever-
increasing costs, our clients need to know they are utilizing every
opportunity to keep down expenses and meet deadlines.
Our related services include:
Operational performance assessment
Business process and technology integration
Business process improvement and re-engineering
Project management ofce reviews
Financial analysis and modeling
Benchmarking and best practice analysis
Regulatory and compliance
Staying up-to-date with the legal requirements governing your
organization and industry while maintaining day-to-day
operations can be overwhelming and challenging. Our risk
advisory team understands the rules that govern your business and
are well-equipped to help you develop a compliance plan that will
meet organizational goals, maximize business opportunities and
minimize enterprise risks.
We can help your organization establish a sustainable framework
that satises compliance needs, as well as contributes to operational
and process improvements. Using our proprietary methodologies
and tools, BDO will advise and assist you throughout the entire
process from start to nish.
Accounting advisory services
We have assisted many real estate clients through the process of
converting to International Financial Reporting Standards (IFRS).
Whether you are adopting Accounting Standards for Private
Enterprises (ASPE), or managing changes in accounting standards,
there are signicant challenges and implications to consider. No
matter which standards you follow, they are likely to change. Our
team of professionals can help you address these matters, including
rst-time adoption issues.
Our real estate and construction clients
Industry description National
Commercial and industrial development 1,848
Construction 2,512
Land developers and home building 1,035
Real estate investment and leasing and real estate
investment trusts
3,721
General real estate 39
Total 9,155
Real estate and construction | BDO 6
OUR TEAM
SAM KHOURY, CAIT, CPA, CITP - PARTNER
skhoury@bdo.ca
Direct: 416 369 6030
Sam has extensive years of assurance and risk advisory experience
specializing in the implementation of change management projects,
including IFRS conversions, enterprise risk management, and other
corporate governance initiatives. He previously articled in assurance
and advisory services where he managed a client portfolio of blue
chip corporations, nancial institutions and medium-sized public
companies. His further expertise includes internal controls, project
management (PMBOK), risk management, change management,
business process re-engineering, and technology solutions
alignment with business objectives.
CARLO MARIGLIA, CA, CPA, CISA, CIA - PARTNER
cmariglia@bdo.ca
Direct: 416 369 3078
Carlo manages and supervises numerous Risk Advisory
engagements across multiple industries. He has extensive
experience in co-sourcing Internal Audit functions and ERM
consulting. He has also played a key role assisting numerous
Canadian public companies and other publicly-accountable
enterprises in their transitions from Canadian GAAP to IFRS.
He previously articled in assurance and business advisory
services, managing various public company engagements, and
later focused on evaluating internal controls over financial
reporting, business process enhancement, IT audit, internal audit,
and risk management. His further expertise includes corporate
governance practices, project management framework and
practices, implementing the Business Continuity Management
Program under BS 25999, and establishing and maintaining an
internal audit function in accordance with IIA standards.
Real estate and construction | BDO 7
OUR TEAM
DAVID KNOTT, CISA - SENIOR MANAGER
dknott@bdo.ca
Direct: 416 369 3016
David is responsible for the management and supervision of
numerous information technology, internal controls, and IT security
related engagements for the BDO Technology and Risk Services
Practice. Prior to joining our rm, he provided IT security services
in assurance and business advisory services in the technology risk
management groups of two other leading rms, managing various
information system services engagements for a wide range of
clients. His further expertise includes information systems audit
services, IT general controls assessments, payment card industry
services, internal IT controls design and testing, ISO 27001
consulting services, IT forensic services, CEO and CFO certication
services, ethical hacking services, disaster recovery and business
continuity planning, and IT project management consulting.
PIERRE TAILLEFER, CA, CISA, CFE - PARTNER
ptaillefer@bdo.ca
Direct: 514 931 0841 ext. 2504
Pierre leads the RAS practice in Montreal with 20 years of in-depth
experience. He has been involved in various engagements covering
service organization controls reports, the Sarbanes-Oxley Act of 2002
and Multilateral Instrument 52-109, investigation and anti-fraud
programs, management of internal audit outsourcing engagements,
outsourcing contract reviews, compliance mandates, and business
process, internal controls, due diligence and security reviews. He has
also worked with cash logistics, IT outsourcing (including applications
and hardware) and broker-dealers. His further expertise includes
business process re-engineering, technology solutions alignment with
business objectives, and IT risk and controls.
Toronto Centre Ofce
Royal Bank Plaza, South Tower
200 Bay Street, 33rd Floor
Toronto ON M5J 2J8
www.bdo.ca
BDO Canada LLP, a Canadian limited liability partnership, is a member of BDO International
Limited, a UK company limited by guarantee, and forms part of the international BDO network
of independent member rms.
BDO is the brand name for the BDO network and for each of the BDO Member Firms.
RAS-REC-R.04.12