TWSR4410 Engagements to Compile Financial Information 　

Status

Revised by Auditing Standards Committee in Taiwan on 4 October, 2022.

Summary

The objective of a compilation engagement is for the practitioner to use accounting expertise, as opposed to auditing expertise, to collect, classify and summarize financial information. The procedures employed are not designed and do not enable the accountant to express any assurance on the financial information. A compilation engagement would ordinarily include the preparation of financial statements (which may or may not be a complete set of financial statements) but may also include the collection, classification and summarization of other financial information.　 　 　 　

In all circumstances when an practitioner’s name is associated with financial information compiled by the practitioner, the practitioner should issue a report.

Independence is not a requirement for a compilation engagement. However, where the practitioner is not independent, a statement to that effect would be made in the accountant’s report.

The practitioner should ensure that there is a clear understanding between the client and the practitioner regarding the terms of the engagement.

The practitioner should plan the work so that an effective engagement will be performed.　 　 　

The practitioner should document matters which are important in providing evidence that the engagement was carried out in accordance with this Standard and the terms of the engagement.

The practitioner should obtain a general knowledge of the business and operations of the entity and should be familiar with the accounting principles and practices of the industry in which the entity operates and with the form and content of the financial information that is appropriate in the circumstances. To compile financial information, the practitioner requires a general understanding of the nature of the entity’s business transactions, the form of its accounting records and the accounting basis on which the financial information is to be presented. The accountant ordinarily obtains knowledge of these matters through experience with the entity or inquiry of the entity’s personnel.

If the practitioner becomes aware that information supplied by management is incorrect, incomplete, or otherwise unsatisfactory, the practitioner should consider performing the following procedures and request management to provide additional information:

• Make any inquiries of management to assess the reliability and completeness of the information provided;
• Assess internal controls;
• Verify any matters or verify any explanations.

The practitioner should read the compiled information and consider whether it appears to be appropriate in form and free from obvious material misstatements. If the practitioner becomes aware of material misstatements, the accountant should try to agree appropriate amendments with the entity. If such amendments are not made and the financial information is considered to be misleading, the accountant should withdraw from the engagement.　

The practitioner should obtain an acknowledgment from management of its responsibility for the appropriate presentation of the financial information and of its approval of the financial information.　

The financial information compiled by the practitioner should contain a reference such as “Compiled without Audit or Review” on each page of the financial information or on the front of the complete set of financial statements.

Effective date

This Standard is effective from 15 December, 2022.