As we continue to work through implementation of CSRS 4200 Compilation Engagements (CSRS 4200), we are sharing our frequently asked questions (FAQs). In our fifth post, we will address the inclusion of the firm’s logo on each individual statement.
If you missed our first four posts addressing terminology being used including financial information, unaudited, and management acknowledgements as well as 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 many, but not all, firms included a copy of their logo on each financial statement. Financial statement service providers even included this as an additional product you could add to your templates. Under CSRS 4200, the inclusion of a logo or letterhead is limited to your Compilation Engagement Report.
Why? This is a good example of one of the most fundamental differences in the NTR and CSRS 4200 standards. Under the NTR standard, the financial statements were the Firm’s. The disclaimer noted this as ‘We prepared these financial statements from information provided my management’. Under CSRS 4200, the financial statements are managements, we are only reporting (a term I use loosely here) upon those financial statements.
The bigger take away here is that this fundamental difference, as to whom the financial statements belong too, drives many of the specific new requirements such as the need to have the financial statements approved prior to dating the report and the need to obtain management’s acknowledgements.
Here at @ClearlineCPA we removed our logo from the NTR financial statement template a while back and recommended the same to our Clearline Consulting clients. A practice management approach we implemented once having experienced the report being removed from a set of our statements.
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.