Page 231 - CA Final PARAM Digital Book.

dealt accordingly. Therefore, amendments are required for the financial information not to be materially
misstated.

If the practitioner becomes aware during the course of the engagement that amendments to the compiled
financial information are required for the financial information not to be materially misstated or the
compiled financial information is otherwise misleading, the practitioner shall propose the appropriate
amendments to management.

If management declines, or does not permit the practitioner to make the proposed amendments to the
compiled financial information, the practitioner shall withdraw from the engagement and inform
management and those charged with governance of the reasons for withdrawing.

If withdrawal from the engagement is not possible, the practitioner shall determine the professional and
legal responsibilities applicable in the circumstances.

New Course – (SM23)
QNO Performing Compilation Engagement
4410.350 TITANIUM CNO-- SRS 4410.060
CA. P has been appointed to compile the financial information of X Limited. CA P is confused whether he
should apply the same procedures which are required to be applied to conduct an audit or there are some
other procedures to discharge the duties under such an engagement. Define the characteristics of
Compilation Engagement. What should be the approach of CA P for performing the Engagement ?
Answer What is a Compilation engagement?
Definition: Compilation engagement is an engagement in which a practitioner applies accounting and
financial reporting expertise to assist management in the preparation and presentation of financial
information of an entity in accordance with an applicable financial reporting framework and issues a report.
Request by Management: Management may request a professional accountant in public practice to assist
with the preparation and presentation of financial information of an entity.

(CNO SRS 4410.060) Performing the Engagement
1A. Knowledge of Entity’s Business:
• The practitioner must obtain sufficient knowledge of the entity’s business, operations, accounting system,
and accounting records to perform the compilation engagement effectively.
1B. Knowledge of Reporting Framework:
• The practitioner needs to understand the applicable financial reporting framework and its application in
the entity’s industry.
2A. Compilation using Provided Information:
• Financial information should be compiled using records, documents, explanations, and other information,
including significant judgments, provided by management.
2B. Discussion of Significant Judgments:
• The practitioner should discuss with management or those charged with governance any significant
judgments, especially those that the practitioner assisted with, in the course of compiling the financial
information.
3. Review before Completion:
• Before completing the compilation engagement, the practitioner must read the compiled financial
information, considering their understanding of the entity’s business and the applicable financial reporting
framework.
4A. Addressing Incomplete or Inaccurate Information:
• If the practitioner discovers any incomplete, inaccurate or unsatisfactory records or information provided
by management, they should bring this to the attention of management and request the corrected or
additional information needed.
4B. Withdrawal for Inadequate Information:
• If management fails to provide the necessary information, the practitioner should withdraw from the
engagement, informing management and those charged with governance of the reasons for withdrawal.
5A. Proposing Amendments:
• If any issues with the financial information or its adherence to the financial reporting framework are found,
the practitioner must propose the appropriate amendments to management.
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