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CSRS 4200 Compilation Engagements

The final version of CSRS4200 – Compilation engagement was released on February 1, 2020.

This standard replaces previous Compilation engagements (Section 9200) as well as Assurance and Related Services Guide (AuG05), Compilation Engagements – Financial Statement Disclosures.

CSRS 4200 Compilation engagement will be effective for compiled financial statements issued for fiscal year ending on or after December 14, 2021.

The remaining article highlights a few key changes that were made to CSRS4200 since the latest exposure draft was published in September 2018:

  • Para. 2 excludes the application of CSRS 4200 to certain services provided by a practitioner.

A new circumstance was added under Para. 2(d) to limit the application of CSRS 4200 in situation where the financial information is presented solely in government-prescribed tax forms such as corporate, trust or personal income tax returns;

  • Para. 3 deals with the situation where a practitioner provides service under Para. 2 that is not subject to CSRS4200; but is requested by the client or voluntarily decides to add a communication on the financial information.

Further requirement is added to this paragraph that “the only appropriate form of communication is a compilation engagement report and all the requirements of this CSRS apply”.

Example: a practitioner who prepares a T2 corporation tax return in the absence of a compilation engagement cannot limit the preparer’s liability by adding a communication directly on the T2 return. If such communication is added, CSRS 4200 applies.

  • Para. 4 deals with the role of a practitioner in a compilation engagement.

Substantial changes were made to Para. 3(c) to agree with details as set out in the sample compilation report.

  • Para. 6 deals with the new requirements that the basis of accounting must be communicated.

A new paragraph (Para. 7) was added to formalize the requirement that a note in the compiled financial information must be included with respect to the basis of accounting.

  • Para. 15 defines a few key terms used in this new standard.

A new definition is added for “Professional judgement” which means:

“the application of relevant training, knowledge and experience within the context provided by this CSRS and relevant ethical requirements, in making informed decisions about the courses of action that are appropriate in the circumstances of the engagement”

  • Para. 22 deals with the requirements for engagement acceptance and continuance.

Changes were made to the preamble which explicitly requires that an acknowledgement from the management of the basis of accounting must be obtained prior to accepting or continuing a compilation engagement. Same applies to inquiries of the intended use of the compiled financial information.

  • Para. 25 deals with the requirements on agreeing the terms of the engagement with the client.

Adjustment was made to the order of terms based on their level of priority. The new standards highlighted the importance of “the objective and scope of the compilation engagement”, which was moved up from subparagraph (d) to subparagraph (a).

In addition, a new requirement was added under subparagraph (e) that the management has to understand

the compiled financial information should not be used by third parties other than those who are in a position to request or obtain further information from the entity or have agreed with management the basis of accounting applied in the preparation of the compiled financial information;

A few changes were also made under subparagraph (e) to clarify that a set of financial information compiled under one engagement is only appropriate for the intended use as agreed in that specific engagement. Any modification to the intended use after the completion of the engagement may require a new compilation engagement, although sometimes the financial information may stay the same.

  • Para. 29 deals with the discussion with management about significant judgments for which assistance has been provided. Significant judgments include making accounting estimates or selecting accounting policies.

This paragraph was newly added.

  • Para. 35 deals with the requirements with respect to amending the compiled financial statements due to facts that become known after the complied financial information has been issued.

This newly added paragraph provides extra guidance on how to properly address such issues if it occurs.

  • Subsequent addition of Para. 36 further deals with the situation where the management intentionally or unintentionally overlooks the practitioner’ request for amendment. In such circumstance, the practitioner has to refer to the requirement as set out in CSOA 5000.2
  • Para. 38 deals with the date of the compilation engagement report.

Additional requirement is added to specify the requirement that the compilation report cannot be dated earlier than the date when the practitioner obtains acknowledge from the management that it has taken responsibility for the final version of the financial information. Acknowledgment could be taken in the forms of a signature on the final version of the compiled financial information or a written communication. Oral acknowledgment documented in a memorandum by the practitioner is acceptable but is not recommended.

For further changes, including changes made to the example of a compilation engagement letter and report, please refer to the full version of the new CSRE 4200, Compilation Engagement.



The article is prepared solely for the discussion between members of the Chartered Professional Accountants of Canada. The author and his firm take no legal responsibility for your use of the information contained in this article.