APES 315: Compilation Engagements and Reports

Determine Whether the Work is a Compilation

Classify the engagement by its purpose and professional work, using Appendix 1 of the APES 315 standard. A spreadsheet can hold compiled accounts, extracted transactions or a valuation calculation. Its file format establishes none of those classifications.

In a hypothetical dispute, preparing company accounts from management records involves different work from analysing the accounts’ assertions through financial statement analysis. An audit or review provides assurance through its own engagement. A valuation answers a value question.

FinTrace supplies bank-statement analysis, a source-linked ledger and written findings. An accountant can use that evidence in their professional work. Receiving that output does not establish that the accountant has accepted a compilation engagement.

Agree the Purpose and Client Responsibilities

Record the intended users, reporting basis and supplied records before accepting the compilation. The APESB business-services guidance identifies engagement terms and client responsibilities as separate parts of the standard.

Alongside APES 305 terms, specify the non-assurance scope, intended distribution and report. For financial statements, obtain the client’s written acknowledgment of responsibility for records and relevant disclosures. Other compilations require an assessment of whether an acknowledgment is needed.

For the hypothetical company, name the directors receiving the accounts and the purpose of their request. Identify who supplies the ledger and who approves accounting judgements. A general signed services letter that says nothing about those accounts leaves the agreed task unclear.

Plan and Perform the Compilation Work

Plan around the entity and the accepted purpose. CPA Australia’s APES 315 overview explains the need to understand the business and relevant accounting practices. Compilation does not generally require audit-style verification, but apparent misstatements require a response.

For the hypothetical company, map the management ledger to the proposed accounts. Keep explanations beside the affected balances. If management describes a director’s deposit as revenue, establish what that description means before carrying it into the accounts. The question is how the item belongs in this compilation, not whether a full fraud investigation has been performed.

Respond to Incomplete or Misstated Information

A suspected misstatement calls for appropriate inquiries or other procedures. Client refusal can require reconsidering continuance under the firm’s policies. Significant matters require timely governance communication.

Suppose the hypothetical ledger records a $40,000 customer receipt, but the supplied statement identifies the payer as a director. Ask management for the transaction’s explanation and supporting records. Record the proposed classification and any correction. A bank receipt alone does not establish revenue.

If the explanation remains unsupported, describe the unresolved amount and its effect on the proposed accounts to the responsible governance contact. Keep the distinction between what the statement shows and what management asserts. The accountant’s response must reflect the unresolved information instead of implying that a completed spreadsheet resolves it.

Issue the Appropriate Compilation Report

Determine the report using Appendix 2 and paragraphs 10.2 to 10.6. Association with the accountant, likely misunderstanding or legal filing requirements can trigger reporting. Internal-only information and a separate practitioner’s assurance engagement have specific treatments.

For internal-only work, an accountant’s report disclaimer and page restrictions address its use. When another practitioner audits or reviews the information, assess the compilation-report need and document any decision to omit it. Significant subjects outside that assurance scope still require a compilation report.

CPA Australia lists the report’s required content. Identify the information and recipients. State the compilation standard, ethical compliance, client responsibilities and absence of audit, review and assurance. Include applicable independence and forecast statements, special-purpose restrictions, report date, practitioner details and an appropriate liability disclaimer.

Use the standard’s report examples for the accepted engagement. Compare the report with every attached page and its non-assurance reference. In the hypothetical case, remove an attachment heading claiming that the accountant has verified all receipts. That wording conflicts with the compilation’s actual scope. Keep reporting on prospective information for a public document within the separate APES 345 framework.

Address Facts Discovered After Completion

Assess later-discovered facts, discuss their impact with the client and document the response. Where revision is needed, advise notification of previous recipients. Escalate client inaction to governance and reconsider continuance if necessary.

Suppose a missing agreement later establishes that the hypothetical director’s deposit was a loan. Retain the issued accounts and the newly received agreement. Record which balance changes, the client discussion and the reason for the revision decision. Identify recipients of the original information and keep the revised communication with the original issue record. A silently replaced file leaves those recipients using an unexplained earlier version.