As we continue to work through implementation of CSRS 4200 Compilation Engagements (CSRS 4200), we are sharing our frequently asked questions (FAQs). In our fourth post, we will address the inclusion of “Unaudited – See Compilation Engagement Report” as a reference on the cover page and the individual statements.
If you missed our first three posts addressing terminology being used including financial information and management acknowledgements and the inclusion of a reference to the note(s) to the financial statements, you can find these on our blog.
Under the former notice-to-reader (NTR) standard each statement included in the financial statements was required to be clearly marked “Unaudited – See Notice-to-Reader”. The purpose of this reference was to ensure users of the financial statements would be directed to the disclaimer noting the limited involvement of the practitioner in the preparation of an NTR. Although many respondents to the exposure draft suggested that this requirement should carry forward, the Audit and Assurance Standards Board (AASB) did not include the requirement in CSRS 4200, noting that the Compilation Engagement Report and the requirement for management to represent that they will not detach the report from the financial statements was considered sufficient.
That leaves us at a common decision point encountered when implementing CSRS 4200. Every firm will need to make a decision as to which policy they prefer. There is no right or wrong answer here. There is no underlying requirement to label the statements and, there is no prohibition from doing so.
Here at @ClearlineCPA we are including a label on the title page and each statement referring to the Compilation Engagement Report. Why? Although not a unanimous decision amongst our Principals, the underlying premise for the decision was not very sophisticated. Why wouldn’t we take another opportunity to direct users to the report to emphasize our limited involvement.
Please share this blog with your colleagues as we continue to work through the implementation of the new standard.
If you would like @ClearineConsulting to review two of your compilation engagements and provide you with firm specific feedback on your templates and other standard implementation suggestions please sign up here. You can also visit our online store if you are looking for CSRS 4200 Compilation Engagement resources or contact us if we can be of assistance.
