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Compilation Engagements - AASOC

Date recorded:

At its meeting on October 22, 2015, the AASOC discussed a presentation it received on the key aspects of the AASB’s project to revise Section 9200, Compilation Engagements. It was noted that questions regarding how Section 9200 is to be applied in practice have been raised with the provincial accounting bodies, including questions on: (i) how much work should be done in a compilation engagement; and (ii) how the practitioner compiling financial statements that deviate significantly from generally accepted accounting principles still complies with ethical requirements that require the practitioner not to be associated with false or misleading financial information. The AASOC noted that the quality of Notice to Reader financial statements can vary widely. AASOC questioned whether there is a need for a new engagement that provides less assurance than a review engagement, but more than a compilation engagement (which is not intended to provide assurance). It was noted that the American Institute of Certified Public Accountants has recently bifurcated its compilation engagement standard in a way that might be appropriate for Canada. Another AASOC member asked why the AASB develops standards for services that are neither audit nor assurance. Cathy MacGregor responded that there are significant public interest issues, in that bankers and other lenders sometimes believe that there is audit or review assurance being provided, even though the report clearly states that no assurance is provided. One AASOC member noted that some users obtain “assurance” even though practitioners do not intend to provide assurance. This needs to be clarified.

Review the minutes on the AASOC's Web site.

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