Essentially, a compilation engagement is one in which a public accountant receives information from a client and arranges it
into the form of a financial statement. While the accountant is concerned that the assembly of information is arithmetically
correct, he or she does not attempt to verify the accuracy or completeness of the information provided nor issue an
expression of assurance. This type of engagement can be used in those limited circumstances where the client and other
users do not need financial statements containing all of the disclosures that are normally required for general purpose use
nor do they need the assurance provided by an audit or a review.
Compilation engagements are not limited to year-end financial statements. They apply equally well for situations where the
public accountant is asked to prepare weekly or monthly financial data, analysis of a business division, segment or
particular location, budgets, cash flows and forecasts or projections. In fact, they can be used in most situations where
there is no need to assess plausibility or check accuracy beyond the arithmetic.
|Compilation engagements are preceded by a notice to reader such as the following:
|I have compiled the balance sheet of XYZ Company Inc. and the statement of income for the year
ended December 31, 200X from information provided by management. These statements have not
been audited, reviewed, nor have I otherwise attempted to verify the accuracy or completeness of
such information, or attempted to determine whether these statements contain departures from
generally accepted accounting principles. Accordingly readers are cautioned that these statements
may not be appropriate for their purposes.
- The financial data is arithmetically correct.
- Commonly accepted by Revenue Canada and other agencies
- Least expensive of the engagements.