Compilation Engagement Deficiencies

Over the last several months, inspections of compilation engagements have highlighted important deficiencies in the application of the new Canadian Standard on Related Services (CSRS) 4200, Compilation Engagements.

What are our significant findings?

• Financial statements were compiled under the previous standard, Section 9200, Compilation Engagements, rather than the new standard which became effective for compiled financial information for periods ending on or after December 14, 2021.
• File documentation did not adequately evidence engagement acceptance or continuance procedures.
• There was inadequate documentation of the understanding of the entity, its systems and the accounting method used.
• Accounting policy notes were incomplete or misleading. Notably, some entities disclosed that financial information was compiled using Accounting Standards for Private Entities (ASPE), however, they did not comply with all the disclosure requirements of this reporting framework (e.g., no cash flow statement, significant missing notes).

What can you do?

• Read CSRS 4200 in its entirety to understand the new requirements.
• Register for relevant training activities.
• Download tools and guidance from CPA Canada.
• Update firm tools and methodology, including the engagement letter, compilation programs and reporting templates.
• Contact CPA Ontario’s Professional Advisory Services at [email protected].