Updated on 27 July 2026

If you have ever applied for a bank loan or sought investors for your company, you may be familiar with Compilation Engagement financial statements (formerly known as Notice to Reader financial statements).

Compilation Engagements are used for a number of financial activities that could affect a business. Reporting finances to shareholders at year-end, seeking new investors, and obtaining a loan from a bank are all situations where compiled financial information may be requested.

Under the current CSRS 4200 standard, practitioners issue a Compilation Engagement Report rather than the former Notice to Reader communication. A Compilation Engagement provides no assurance on the compiled financial information.

How can your business benefit from Compilation Engagement financial statements? Accountor CPA can help you determine what type of financial statement engagement is best for your company.

What Is a Compilation Engagement Statement?

A Compilation Engagement Report, formerly known as a Notice to Reader Report, is prepared by a practitioner using financial information provided by management. The practitioner assists management in compiling the financial information in accordance with an agreed basis of accounting.

Importantly, a Compilation Engagement does not provide assurance on the financial information. The practitioner does not perform an audit or a review engagement and does not express an audit opinion or a review conclusion. The compiled financial information also includes a note describing the basis of accounting used in its preparation.

Compilation Engagements can be useful when shareholders, investors, lenders, directors, or other users need professionally compiled financial information but do not require assurance. When assurance is required, a business may need a Review Engagement or an Audit Engagement instead.

Why Are Compilation Engagement Financial Statements Needed?

Compilation Engagement financial statements can be used in a number of situations to provide financial information to business owners and other users or to fulfill specific reporting requirements.

• Annual Reporting to Owners: Although this may not be required, a business owner or shareholders may want compiled financial information prepared for their own use or as part of the corporation’s financial records.
• Bank Loans and Creditors: Banks and creditors may request compiled financial information when evaluating a business for a loan or credit. Depending on the lender and financing arrangement, reviewed or audited financial statements may be required instead.
• Investors: Investors may request compiled financial information to better understand a company’s financial position. Depending on the size of the investment, the business, and the investor’s requirements, the investor may request reviewed or audited financial statements.
• Selling a Business: When selling a business, prospective buyers may request compiled financial information from prior years as part of their due diligence. Depending on the size and complexity of the transaction, the financial statements may also be required to be reviewed or audited.
• Income Tax Filing: Compiled financial information may be prepared alongside year-end accounting and corporate tax services, providing the financial information used to prepare the corporation’s tax return.

Who Can Sign a Compilation Engagement Report?

A Compilation Engagement Report is issued by a practitioner who performs the engagement in accordance with CSRS 4200. Requirements governing who may provide compilation engagement services can vary by province or territory, so businesses should ensure that their practitioner meets the applicable professional and regulatory requirements.

In Ontario, compilation engagements provided by CPA firms are subject to CPA Ontario requirements, including firm registration requirements. A Public Accounting Licence may also be required in certain circumstances, depending on the nature and use of the engagement and report.

A common misconception about Compilation Engagement financial statements is that financial statements produced internally with accounting software are automatically equivalent to a Compilation Engagement. Accounting software can produce balance sheets, cash flow statements, and income statements for internal use, but these do not constitute a Compilation Engagement Report prepared in accordance with CSRS 4200.

What Is the Cost of a Compilation Engagement?

The fees for a practitioner to prepare a Compilation Engagement vary depending on the business. If a practitioner has to prepare compiled financial information for multiple years at one time, the cost will generally be higher than for a single year. Similarly, a larger or more complex business may have a higher cost for preparation than a startup or a small business.

A Compilation Engagement will typically cost less than a Review Engagement or Audit Engagement because it does not provide assurance and generally involves fewer procedures than a review or audit.

It is always recommended to consult with your practitioner to determine how often compiled financial information should be prepared and whether a Compilation Engagement is appropriate for your business and the intended users of the financial information.

How to Prepare a Compilation Engagement Financial Statement

Compilation Engagement financial statements are often prepared after the end of a company’s fiscal year. A corporation’s fiscal year-end does not necessarily fall on December 31.

The team at Accountor CPA usually requires the following documents and follows these steps to prepare compiled financial information and a Compilation Engagement Report:

1. Obtaining the trial balance – a summary of transactions recorded in the bookkeeping system.
2. Reviewing the information provided by management and considering whether it appears incomplete, inaccurate, or otherwise unsatisfactory.
3. Preparing or proposing adjusting journal entries, where necessary, for items such as accrued expenses, taxes, or depreciation of fixed assets.
4. Grouping and adjusting accounts as necessary to prepare the compiled financial information.
5. Preparing the compiled financial information using the agreed basis of accounting, including a note describing the basis of accounting used.
6. Preparing the Compilation Engagement Report in accordance with CSRS 4200 and providing the compiled financial information and report to management for their intended use.

Components of a Compilation Engagement Report in Canada

A Compilation Engagement Report differs from Review Engagement and Audit Engagement reports in the nature of the work performed and the level of assurance provided. Under CSRS 4200, the report and compiled financial information include several important elements.

• Basis of Accounting: The compiled financial information includes a note describing the basis of accounting applied in its preparation. The basis of accounting is selected by management and is appropriate for the intended use of the compiled financial information.
• Management’s Responsibility: The report explains that management is responsible for the accompanying compiled financial information, including the accuracy and completeness of the underlying information used to prepare it.
• Practitioner’s Responsibility: The report explains that the practitioner performed the compilation engagement in accordance with CSRS 4200, Compilation Engagements, using information provided by management.
• No Assurance Provided: A Compilation Engagement is not an audit or a review engagement. The practitioner does not perform procedures to verify the accuracy or completeness of the information provided by management and does not express an audit opinion, a review conclusion, or any form of assurance on the compiled financial information.

Compilation Engagement Report Sample

Below is a simplified example of the information typically included in a Compilation Engagement Report under CSRS 4200. The exact wording and content may vary depending on the engagement and applicable professional requirements.

Review Engagement vs Compilation Engagement

A Review Engagement is a higher-level financial statement engagement than a Compilation Engagement. A Review Engagement provides limited assurance on the financial statements, while a Compilation Engagement provides no assurance.

The difference between a Review Engagement and a Compilation Engagement is that, during a review, the practitioner primarily performs inquiry and analytical procedures to determine whether anything has come to their attention that causes them to believe the financial statements are not prepared, in all material respects, in accordance with the applicable financial reporting framework. The practitioner then expresses a limited assurance conclusion.

A Review Engagement may be requested by banks, lenders, investors, or other third parties when they require a higher level of assurance than a Compilation Engagement provides.

A higher level of assurance is provided by an Audit Engagement. During an audit, the auditor performs procedures to obtain sufficient appropriate audit evidence and provides reasonable assurance that the financial statements are free from material misstatement. An audit may include testing transactions and balances, evaluating accounting policies and estimates, assessing internal controls relevant to the audit, and performing other audit procedures.

Prepare a Compilation Engagement in Ontario and Canada with Accountor CPA

At Accountor CPA, our team of experienced chartered accountants can provide Compilation Engagement services (formerly known as Notice to Reader) for your small business, SME, or corporation.

If your company needs compiled financial information and a Compilation Engagement Report, we can help. Contact us today for a consultation.

Conclusion

One important aspect of Compilation Engagements (formerly Notice to Reader) is their role in providing compiled financial information for businesses that do not require the level of assurance provided by a Review or Audit Engagement. Compilation Engagements may be useful for small businesses and corporations that need financial information for management, shareholders, lenders, investors, or other intended users.

Unlike Review and Audit Engagements, a Compilation Engagement provides no assurance on the compiled financial information. Under CSRS 4200, the compiled financial information includes a note describing the basis of accounting used in its preparation, while the Compilation Engagement Report clearly explains the responsibilities of management and the practitioner.

For more detailed guidance, refer to CPA Canada’s information on CSRS 4200, Compilation Engagements.

Frequently Asked Questions (FAQs)

What Is a Compilation Engagement Financial Statement (Formerly Notice to Reader)?

A Compilation Engagement, formerly known as a Notice to Reader (NTR), involves a practitioner assisting management in compiling financial information based on information provided by management. A Compilation Engagement provides no assurance on the compiled financial information.

When Do Businesses Need a Compilation Engagement?

Compilation Engagements may be used for internal reporting, bank loans, investor considerations, or the sale of a business. Whether a Compilation Engagement is appropriate depends on the needs of the business and the intended users of the financial information.

Who Can Prepare and Sign a Compilation Engagement Report?

A Compilation Engagement Report is issued by a practitioner who performs the engagement in accordance with CSRS 4200. Professional and regulatory requirements governing who may provide compilation engagement services can vary by province or territory.

How Much Does It Cost to Prepare a Compilation Engagement?

The cost varies based on the size and complexity of the business and the work required. Preparing compiled financial information for multiple years may cost more than preparing it for a single year. A Compilation Engagement generally involves fewer procedures than a Review or Audit Engagement.

What Are the Components of a Compilation Engagement?

A Compilation Engagement includes compiled financial information containing a note describing the basis of accounting used in its preparation, together with a Compilation Engagement Report. The report describes management’s and the practitioner’s responsibilities and states that no audit or review has been performed and no assurance is provided.

How Does a Compilation Engagement Differ From a Review Engagement?

A Compilation Engagement provides no assurance on the compiled financial information. A Review Engagement involves primarily inquiry and analytical procedures and provides limited assurance on the financial statements.

Can Internal Staff Prepare a Compilation Engagement Report?

Internal accounting staff can prepare bookkeeping records, financial information, and internal financial statements. However, these documents are not automatically equivalent to a Compilation Engagement Report issued under CSRS 4200. The practitioner performing the compilation engagement must meet the applicable professional and regulatory requirements.