What a compilation engagement is
In a compilation, a CPA takes the financial information you provide and presents it as a formal set of financial statements. The statements are prepared under CSRS 4200, the Canadian standard for compilation engagements, and come with a compilation report. Older statements of this kind were called a Notice to Reader, and you will still hear that name.
The CPA does not audit or review the figures. The report says so plainly: no opinion is given on whether the statements are accurate or on how the business is performing.
What is included
- Organizing income, expenses, assets and liabilities into statement form
- Presenting them in the format readers expect, with the compilation report attached
- Year-end adjustments agreed with you, so the statements and the corporate tax return agree
- A clean file to support the T2 and any lender or internal use
Not included: verifying receipts, testing balances or giving any opinion on the results.
When a compilation is the right fit
A compilation suits a business that needs statements to file its corporate tax return, manages its affairs internally with no external reporting requirement, and has no lender, investor or grant program asking for a different kind of engagement. For most owner-managed companies, incorporated professionals and holding companies, it meets the requirement at a sensible cost.
When it is not enough
Some lenders, grant programs and investors ask for statements prepared under a different engagement standard. If that applies to you, the request will usually say so in writing. Tell us what has been asked for and we will explain what it means and what it would take.
Why a CPA
Only a CPA in public practice can issue a compilation report under CSRS 4200. The standard sets out what the practitioner must understand about your business and what must be disclosed, so even the simplest statements carry a professional's name and judgment.
See our financial statements service, or contact us about your year-end.