Practitioners must ensure they obtain management acknowledgement of the final compiled financial information as it relates to Canadian Standard on Related Services (CSRS) 4200 Compilation Engagements, and include this acknowledgement in their documentation. This is a requirement of the Standard and failure to do so would result in non-compliance.
The practitioner must obtain an acknowledgment from Management that Management has taken responsibility for the final version of the compiled financial information (Ref: Par 35). Additionally, the practitioner must ensure the compilation engagement report is dated on the date the practitioner has completed the engagement, which includes obtaining the acknowledgment from Management (Ref: Par 40). Management’s acknowledgement of the final compiled financial information may take different forms (Ref: Par A44).
Below are some best practices for practitioners to consider, during the final stage of a compilation engagement, in obtaining final Management acknowledgement:
- Arrange a close out meeting with Management to go over the:
- final compiled financial information in detail; and
- draft compilation engagement report
- During, or subsequent to, the close out meeting, ensure you obtain Managements’ approval of the final version of the compiled financial information. This can be done by (Ref: A44):
- an oral acknowledgment by Management which in turn is documented in the file by the practitioner;
- A signature on the final version of the compiled financial information; or
- A written communication (e.g., in paper form, or by electronic or other medium). An acknowledgment letter template is available in the PACT which can be found in the resource section below.
- Once Management approval has been obtained, ensure the compilation engagement report is dated on the same date.
- Ensure Management’s approval forms part of your file documentation. Using a checklist is a good way to ensure all the requirements of CSRS 4200, including obtaining Managements’ acknowledgement, are completed and documented. The date of the report is the date the compilation is completed. This includes Management acknowledgement.
Additional CSRS 4200 resources
KBASE COLLECTION – CSRS 4200 contains a list of resources that will assist practitioners in applying this standard.
Practice management, advisory, compilation and tax guide (PACT) contains sample checklists and letter templates (including a Management Acknowledgement letter template)