Compilation Engagement Services in Mississauga
Clearly Prepared Financial Information for Your Business
Need financial statements prepared from your business records? Shami CPA provides compilation engagement support for businesses that need organised financial information for management, business reporting, or discussions with relevant third parties.
What Is a Compilation Engagement?
A compilation engagement is a professional accounting service in which a CPA assists management in preparing financial information from information provided by the business. In Canada, these engagements are conducted under Canadian Standard on Related Services (CSRS) 4200 when the standard applies.
The resulting financial information may include a balance sheet, statement of earnings, and supporting notes, depending on the engagement’s scope and the agreed basis of accounting. A note explaining that basis helps readers understand how the information was prepared.
Unlike an audit or review engagement, a compilation does not involve procedures designed to express an opinion or conclusion on the financial information. Consequently, it provides no assurance about the accuracy or completeness of the underlying information supplied by management.
When might a business need a compilation engagement?
A business may consider a compilation engagement when it needs financial statements prepared for internal use or when an external party requests compiled financial information.
For example, an owner-managed company may need year-end financial statements to understand its financial position. Alternatively, a lender or another stakeholder may request financial information prepared on a specified basis.
However, the recipient’s requirements matter. A compilation engagement may not meet a lender’s, investor’s, or other user’s requirements if that party expects an audit or review. Confirm the required reporting level before proceeding.
Who We Help With Compilation Engagements
- Cross-Border Relationship:
- Mississauga CPA Practice
- US-Canada Taxes
01
Incorporated and Owner-Managed Businesses
Privately held corporations may need compiled financial information to document their financial position and results for a particular period. A compilation can help organise information for management and other intended users, provided its limitations are appropriate for their purposes.
02
Small and Medium-Sized Businesses
Smaller businesses may require professionally prepared financial statements without commissioning an audit or review. The appropriate engagement depends on the intended use of the statements and the requirements of anyone who will receive them.
03
Professional Practices
Professional practices may need compiled financial information for business reporting, management discussions, or other agreed purposes. The engagement’s scope and accounting basis should reflect the practice’s circumstances and the intended users’ needs.
04
Businesses Responding to a Third-Party Request
A lender, shareholder, or other stakeholder may ask a business to provide financial statements or a compilation engagement report. Before accepting the engagement, clarify what the recipient requires. A compilation report does not automatically satisfy a third party’s reporting or assurance requirements.
Audience Index
Professional Categories
Not sure which situation applies to you? We can help you understand the tax matters that may need to be addressed.
What We Help With in a Compilation Engagement
The precise scope depends on the engagement, the available records, and the intended use of the compiled financial information.
02
Reviewing the Information Provided for Compilation
We discuss the accounting records and supporting information needed to prepare the agreed financial statements. Depending on your circumstances, these materials may include:
- Trial balance and general ledger reports.
- Bank and credit account information.
- Revenue and expense summaries.
- Accounts receivable and accounts payable details.
- Loan balances and supporting schedules.
- Information about assets, liabilities, and equity.
- - Relevant prior-year financial statements and accounting records.
The exact requirements vary by business. Importantly, a compilation is not an audit or review, so you should not assume that the CPA will independently verify all the underlying figures.
03
Establishing the Basis of Accounting
A compilation engagement requires an appropriate basis of accounting for the financial information. The basis determines how transactions and balances are presented and interpreted.
We discuss the applicable basis with management and its intended use. The compiled financial information includes a note describing the basis of accounting applied, as required under CSRS 4200.
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Preparing the Compiled Financial Information
Using the information provided and the agreed scope, we assist in preparing the financial information in the appropriate format.
Depending on the engagement, the statements may present assets, liabilities, revenues, expenses, and other relevant balances. The final contents depend on the reporting purpose and the agreed basis of accounting.
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Explaining the Compilation Engagement Report
The compilation engagement report describes management’s responsibilities, the CPA’s role, and the limitations of the engagement.
It makes clear that the CPA has not performed an audit or review and does not provide assurance on the compiled financial information. Therefore, readers should consider whether the statements are suitable for their particular needs.
Service 01
Understanding Your Business and Reporting Needs
We begin by discussing your business, its operations, the period covered, and the intended users of the financial information. This helps establish whether a compilation engagement is appropriate for the purpose.
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Organizing Tax Records and Supporting Documents
Accurate records are important when explaining transactions or supporting amounts reported to the CRA.
Depending on the matter, relevant information may include:
- CRA letters, notices of assessment, and reassessments.
- Copies of the affected tax returns and schedules.
- Receipts, invoices, bank records, and transaction details.
- Accounting records or financial statements relevant to the issue.
- Previous correspondence with the CRA.
Only documents relevant to the matter should be submitted, with sensitive information handled through an appropriate secure process.
How Our Compilation Engagement Process Works
Discuss Your Reporting Requirements
We first ask why you need compiled financial information and who will use it. If a lender or another third party has requested the statements, share its instructions before the engagement begins.
Confirm the Scope and Engagement Terms
Next, we discuss the required financial information, the applicable basis of accounting, your responsibilities, and the proposed engagement terms. This stage also helps determine whether a compilation is appropriate for the intended purpose.
Gather Your Accounting Records
You provide the records and supporting information needed for the agreed scope. Depending on the business, this may include year-end balances, transaction summaries, loan details, and prior financial statements.
Prepare the Financial Information
Using the information supplied, we assist in preparing the agreed financial statements and related basis-of-accounting note. Where questions arise about significant judgments or the presentation of information, we discuss them with management as appropriate.
Review the Draft With Management
We discuss the draft financial information with you so that management can address questions and acknowledge its responsibility for the final version. This step does not turn the compilation into an independent audit or review.
Finalise the Compilation Engagement
Once the applicable engagement requirements have been completed, the final compiled financial information and compilation engagement report are issued. You can then provide the documents to the intended users, subject to the agreed purpose and any relevant restrictions.
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Why SHAMI CPA
Why Choose Shami CPA for Compilation Engagements?
Experience With Business Accounting
Shami CPA is positioned to support businesses that need clear financial information and practical accounting guidance. The firm’s stated professional background includes more than 30 years of experience; confirm the precise wording and attribution before publishing this claim on the service page.
Clear Explanations of Reporting Requirements
Compilation reports have specific limitations that business owners and statement users need to understand. Clear communication helps you distinguish between preparing financial information and obtaining independent assurance on it.
A Scope Based on Your Circumstances
Different businesses have different reporting needs. Discussing your intended use, available records, and any third-party requirements at the outset helps establish an appropriate engagement scope.
LET'S TALK ABOUT YOUR TAX SITUATION
Tell Us About Your Tax Return
Start with a conversation to determine whether a compilation engagement is suitable for your circumstances.
Need a Compilation Engagement for Your Business?
If your business needs compiled financial information, Shami CPA can discuss the purpose of the statements, the records available, and the reporting requirements you need to meet.
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