Canadian Standards on Related Services 4200 Compilation Engagements

By CPABC; Published in CPABC in Focus
Published: 03/01/2020

The Canadian Standard on Related Services (CSRS) 4200, Compilation Engagements, was approved by the Auditing and Assurance Standards Board (AASB) in October 2019, and issued as part of the CPA Canada Handbook – Assurance in February 2020. As noted in the January/February issue of CPABC in Focus (page 9), CSRS 4200 is effective for compiled financial information for periods ending on or after December 14, 2021, and earlier application is permitted but not required.

CSRS 4200 brings significant changes to the compilation standard found in Section 9200 of the Handbook. These changes were needed to clarify which services fall within the scope of compilation engagements and address:

  • Confusion among practitioners about the services that fall within the scope of compilation engagements;
  • The fact that compiled financial information originally intended for use by management is often being provided to third parties;
  • The wide variation in the extent of work performed by practitioners;
  • The gap between lenders’ perception of the extent of work performed in compilation engagements and the reality; and
  • The lack of clarity among lenders as to the basis of accounting applied in the preparation of compiled financial information.

Some key points

  • CSRS 4200 clarifies which services fall within the scope of a compilation engagement and provides several scope exclusions. 
  • Acceptance or continuation of an engagement requires practitioners to ask management about the intended use of the compiled financial information and obtain management’s acknowledgment of the basis of accounting to be applied. When a third party is the user of the compiled financial information, the engagement can only be accepted if the third party is able to request and obtain further information from the entity and has agreed with management about the basis of accounting to be applied.
  • CSRS 4200 establishes the minimum work effort and documentation requirements to perform a compilation engagement. The practitioner must obtain knowledge about the client’s business and operations and its accounting system and records; about the basis of accounting to be applied; and, if assisting the client, about the significant judgments to be used. In addition, any documentation prepared must be sufficient to enable an experienced practitioner—one with no previous connection to the engagement—to understand how the requirements of this standard were met.
  • A new requirement, not found in Section 9200, involves a note describing the basis of accounting applied in the preparation of the compiled financial information. This addresses users’ past challenges in understanding how the financial information was compiled.
  • Under CSRS 4200, the compilation engagement report will provide more information than is required in Section 9200—including the addition of the basis of accounting used. This will help users better understand the differences between the responsibilities of management and those of the practitioner.
  • CSRS 4200 is expected to give practitioners a clearer definition of their responsibilities—both to the standard and to their clients. At the same time, it should enable users to better understand how the financial information was compiled and whether it meets their financial needs.


Meeting the new standard may require an increased amount of work effort and file documentation. In addition, performing an engagement may require an increased level of technical knowledge with regard to financial statements. As a result, engagement fees may increase.

To support practitioners and stakeholders in adapting to the new standard, CPA Canada has released a variety of implementation materials, including a practitioner’s alert and briefings for management and third parties.

These resources can be found on the CPA Canada website at (search for “New compilation standard: Guidance resources”). In addition, an implementation tool is slated for release in April 2020, and other resources are currently being developed to educate both members and the general public about the new standard.

Further, CPABC has developed two new seminars:

  • Compilation Engagements – Overview of the New Standard (CSRS 4200). This half-day, in-person seminar will be launched in May 2020.
  • Compilation Engagements – Application of CSRS 4200. This seminar will be offered in our fall 2020 PD program.

Details on these offerings and other seminars being planned for 2020-2021 will soon be available online at

One final resource is the AASB’s Basis for Conclusions document on CSRS 4200, which was released on January 31, 2020. The document provides a brief summary of the AASB’s objectives in developing CSRS 4200, describes the public exposure and approval steps for this project, and explains how the AASB dealt with significant matters arising from comments received in response to its Exposure Draft. Visit (choose “Other Canadian Standards” on the home page, then click “Plain Language Resources”) to access this and other resources related to compilation engagements. Basis for Conclusions is also available in the online version of the Handbook.

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