New Compilation Standards
New compilation standards, CSRS 4200

What is a Notice to Reader?
Financial statements have three levels of assurance, ranging from no assurance for compilation engagements, limited assurance from review engagements, and reasonable assurance from an audit engagement. Compilations before this standard change were commonly know as Notice to Readers (or “NTRs”) since that was the title of page one of issued financial statements. It essentially cautioned readers of the statements that the statements may not be appropriate for their purposes.
What is Changing?
The changes that most people will notice will be:
· engagements with no assurance will no longer be called NTRs, but compilations
· a more comprehensive annual engagement letter
· a new compilation engagement report on page one
· new notes to the financial statements.
There will be a larger focus on the users of the financial statements, so your accountant will ask who expected users of the financial statements are. They will also ask about the “basis of accounting,” which essentially means how various numbers such as accounts receivable or short term investments are valued. There is an example in the link at the end of this post. Your accountant will also get to know your business better with more questions asked during this process. This will have a side benefit of being able to provide better business and accounting advice.
Further Reading
CPA Canada has provided some online resources to help everyone with this change of standards. Please click the following link, and most specifically the Management Briefing (which downloads a PDF) for more information:
