Objective APES 315 Compilation of Financial Information (the Standard) sets out mandatory requirements and guidance for members in public practice who undertake compilation engagements. The application also encourages application to engagements to compile non-financial information.
Scope and application APES 315, which took effect on 1
J anuary 2010, requires members in public practice in Australia to adhere to its mandatory requirements when they compile financial information. For members in public practice outside of Australia the scope of APES 315 must be followed as long as local laws and/or regulations do not prevent them from doing so.
Fundamental responsibili ties of members APES 315 requires members to observe and comply with their public interest obligations when they perform a compilation engagement. The Standard also reminds members of their professional obligations established in APES 110 Code of Ethics for Professional Accountants in respect of Section 130 Professional Competence and Due Care.
APES 315 states that independence is not a requirement for a compilation engagement, however, where the member is not independent disclosure is required in the compilation report.
Objectives of a compi lati on engagement APES 315 states that the objectives of a compilation engagement are to use accounting expertise to collect, classify and summarise financial information. These procedures are required for the compilation engagement, however, they do not enable the member to express any assurance on the financial information.
Activities that fall outside the scope of the Standard include:
preparation of a taxation return and financial information prepared solely for inclusion in the tax return analysis of figures provided by the client to report to the client relaying of information to the client without summarisation of the information.
Procedures APES 315 suggests the member obtain general knowledge of the business, client operations, and accounting principles and practices. Procedures such as verification of information and assessments of reliability and completeness are not required unless the member has reason to believe information supplied by the client is false or misleading or material information has been omitted. Where this occurs, the member is obligated to ask the client for further information to complete the engagement.
Reporting on a compilati on engagement A member must issue a compilation report where the members name is identified with the compiled financial information; the compiled financial information is for external use; or the intended user may not understand the nature and scope of the members involvement.
APES 315: Compilation of Financial Information Fact Sheet
Mandatory elements to be included in a compilation report are a title; an addressee; a statement that the engagement is performed in accordance with the standard; a statement that the member is not independent from the client (where relevant); identification of the compiled financial information, noting that it is based on the financial information provided by the client (if applicable); the basis of any forecast information; key assumptions (applicable to prospective financial information only); a statement that the client is responsible for the financial information provided; a statement that neither an audit nor a review has been carried out and that no assurance is expressed on the compiled financial information; identification that the member is reporting on a special purpose financial statement (if applicable); a paragraph drawing attention to the disclosure of material departures from the applicable financial reporting framework (if applicable); the date of the compilation report; the members or firms address; the members or firms name and signature; and an appropriate disclaimer of liability.
Refer to the Standard for information concerning: definitions public interest professional competence and due care confidentiality planning general purpose of special purpose financial statements defining the terms of engagement misstatements documentation responsibility of the client communication of significant matters subsequent discovery of facts examples of compilation reports.
Disclaimer The above material is only general in nature and not intended to be specific to the readers circumstances. The material does not relieve you of your obligation, as a member of CPA Australia, to ensure that you comply with professional standards. To keep up-to-date members should visit the APESB website at apesb.org.au.
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