Notice to reader
A notice to reader is the former name for a compilation engagement, in which, BDC says, the accountant usually relies on the company’s information and does not audit or validate the figures. CPA Québec says the compilation engagement report replaces it for periods ending on or after December 14, 2021.
Small-business statements may carry a short accountant’s page on the front. BDC says the compilation engagement was formerly known as the notice to reader, and that it usually relies entirely on the information provided by the company, without the accountant auditing or validating the figures. CPA Québec says the compilation engagement report replaces the notice to reader for compiled financial information for fiscal periods ending on or after December 14, 2021.
What the newer report says
CPA Québec shows a sample compilation report stating the work was done under Canadian Standard on Related Services 4200, Compilation Engagements, and that the accountant did not perform an audit or review, nor verify the accuracy or completeness of management’s information.
What to ask
- Which year-ends carry a notice to reader and which carry a compilation report?
- Did anyone other than the owner check the figures?
- Would the lender or buyer accept compiled statements, or want a review or audit?
See the financial records checklist and compilation, review and audit engagements.
Sources
This definition is checked against primary sources. Links were last confirmed on the dates shown.
- 01Ordre des CPA du QuébecRegulatorCPAs and financial statements
- 02Business Development Bank of CanadaGovernmentWhat are financial statements?
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