Moore Stephens


Notice to reader: An old standard is changing

Avis au lecteur : évolution des normes canadiennes

CONTRIBUTED BY MOWBREY GIL for the Canadian Overview of Q4 2021. A newsletter published by Canadian member firms of Moore North America. These articles are part of our mission to become partner of your success by keeping you informed of the news.

Canadian Standards are changing as it pertains to the well-known “Notice to Reader” financial statement.

Section 9200, which is the current standard for Compilation Engagements, has been in effect since 1987. To put into perspective that is 34 years without significant change to a standard in an industry of everchanging and evolving standards.

Notice to reader: An old standard is changing

When is this happening

Mark your calendars for December 14, 2021.

For periods ending on or after this date the new Standard CSRS 4200 becomes effective.

So why now?

Simply put there is a GAP between how the statements are deployed. Said another way, financial statements reported under the old Section 9200 are to be used by Management; however, the reality is these same financial statements are often sent out into the world to be used by third parties such as lenders.

From a practical point of view, in the practitioner’s office there are variations in the work performed when preparing Notice to Reader financial statements:

  • This work includes not only the level of work performed by different practitioners but also the level of documentation in each practitioner’s working papers.

On a bigger front there is lack of clarity as to the basis of accounting applied when practitioners prepare Notice to Reader financial statements.

Now we know why the change is needed and we also know the date for the changes.

What to expect in the new year?

CSRS 4200 changes the performance requirements for Compilation Engagements. There are five critical discussion points to address when conforming to the new Standard.

  • Scope
    • CSRS includes a scope that clarifies which services constitute compilation engagements, and which services are excluded from the new standard such as bookkeeping and preparing a corporate tax return.
    • Determining the scope of your engagement will determine if you fall under CSRS.
  • Engagement Acceptance or Continuance
    • Prior to accepting or continuing a compilation engagement we are required to enquire with Management the intended use of the statements and ensure Management agrees with the basis of accounting to be applied.
  • Basis of Accounting
    • Under the new standard, the basis of accounting, is required to be included in a note to the financial statement.
  • Work Effort and Documentation and finally
    • Under the new standard the work effort is to be documented with respect to client knowledge, and enquiries with Management to ensure they understand and accept responsibility for the financial statements. A greater level of documentation is required under the new standard.
  • Reporting
    • The Report is bigger!
    • Under the new standard there is a more comprehensive Engagement Report which more clearly describes the responsibility of Management and the Practitioner. This report also describes the nature and scope of the engagement.


As Practitioners we have a responsibility to read CSRS 4200 to understand its objectives and how to apply this new standard throughout our clients.

As Users of financial statements issued under CSRS 4200 you can expect more enquiries and standardization from your accountant as they relate to compilation engagements.

The new standard will have a significant impact on all complied financial information and the users of that information.

Users, both management and third parties, will certainly benefit from the significant changes coming with this new Standard. This article is a small glimpse into the upcoming changes for compilation engagements. To gain a more comprehensive understanding of CSRS 4200, the Standard is available for review through CPA Canada.

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