chapter outline volume 1 - thomson...

CHAPTER OUTLINE

Volume 1

Chapter Topic

1 Introduction, Background and Administration2 Review Procedures3 Review Engagement Report4 Illustrative Review Working Papers5 Form and Presentation of Financial Statements6 Cash Flow Statements7 Unincorporated Entities8 Interim Financial Reporting9 Related Party Transactions and Economic Dependence10 Subsequent Events11 Contingencies

Volume 2

12 Contractual Obligations — Commitments13 Accounting for Interests in Joint Arrangements14 Compilation Procedures — Notice to Reader15 Compilation of Forecasts and Projections16 Personal Financial Statements17 Illustrative Compilation Working Papers

Appendix

A Correspondence/Letters (CL)B Review Engagement Forms (REF)C Review Engagement Checklists (REC)D Compilation Engagement Checklists & Form (CEC)E Financial Statement Disclosure Checklists (DL)

Index

vii

02/16

CHAPTER 1

INTRODUCTION, BACKGROUNDAND ADMINISTRATION

Table of Contents

Section Description Page No.

100 OUTLINE AND PURPOSE OF GUIDE ...................................................... 1-1.21 Practitioner ...................................................................................... 1-2

105 PROFESSIONAL STANDARDS ................................................................ 1-4.01 CPA Canada Handbook ................................................................. 1-4.04 CPA Canada Auditing and Assurance Standards Board .......... 1-4.07 Assurance Standards..................................................................... 1-4.10 CPA Canada Handbook — Assurance ........................................ 1-5.13 Authority of Auditing and Assurance Standards ....................... 1-7.14 Guidelines ........................................................................................ 1-7.17 Other Publications (CPA Canada) ................................................ 1-8

.18 Auditing and Assurance Bulletins and Risk Alert .......... 1-8

.19 Practice Advice .................................................................... 1-8

.20 The Buzz ............................................................................... 1-9

.21 Articles in CA magazine ..................................................... 1-9.22 International Standards.................................................................. 1-9

107 ACCOUNTING AND FINANCIAL REPORTING STANDARDS ............... 1-10.01 Generally Accepted Accounting Principles (GAAP) .................. 1-10

.08 What Type of Issues Does GAAP Address?.................... 1-11

.09 Basic Concepts .................................................................... 1-11

.10 Definition............................................................................... 1-11.12 What Are Primary Sources of GAAP? ......................................... 1-11.13 What Are Other Sources of GAAP? ............................................. 1-12.16 Statement Presentation.................................................................. 1-12.17 Reviewed Financial Statements .................................................... 1-12.19 Bases of Accounting Other than GAAP ...................................... 1-13.20 Compilation Engagements ............................................................ 1-13

108 ASSOCIATION ............................................................................................ 1-13

109 INDEPENDENCE ........................................................................................ 1-14.02 Review Engagements.......................................................... 1-14.03 Compilations ........................................................................ 1-14

.08 Framework of Standard ................................................................. 1-15

.12 Threats to the Practitioner’s Independence ................................ 1-16

.14 Safeguards....................................................................................... 1-16

.17 Examples of Threats and Safeguards.......................................... 1-17

.23 Overview of Prohibitions ............................................................... 1-18

TOC 1-112/15

CHAPTER 1


Table of Contents (continued)


.27 Policies on Independence for the Practitioner ........................... 1-19.28 Written Statement ................................................................ 1-20

.30 Consultations .................................................................................. 1-20

.32 Compilations ................................................................................... 1-20.34 Would a Compilation Suffice for a Particular Client?..... 1-20

110 UNAUDITED FINANCIAL STATEMENTS (REVIEWS ANDCOMPILATIONS) .................................................................................. 1-21

.02 Why Unaudited Financial Statements?........................................ 1-21

.05 Comparison of Audit, Review and Compilation ......................... 1-22

115 DETERMINING THE CLIENT’S NEEDS.................................................... 1-23.04 Who Will Use the Financial Statements? .................................... 1-23

.07 Review (or Audit) of Consolidated Financial Statements—Compilation of Individual Statements......................... 1-24

.08 Dealing with the Needs of Banks and Other Creditors ............. 1-24

120 ACCEPTING A NEW CLIENT .................................................................... 1-24.06 Prospective Client’s Reputation ................................................... 1-25

.07 Sources of Information ....................................................... 1-28.08 Assessment of Required Services ............................................... 1-28

.10 Technical Expertise and Available Resources ................ 1-28

.12 Independence ....................................................................... 1-29

125 COMMUNICATION WITH PREDECESSOR ACCOUNTANT................... 1-29.14 Agreement With Successor in Writing ............................. 1-31

130 GENERAL FIRM PROCEDURES .............................................................. 1-31.02 Firm Policies, Appendix B (REF-1)............................................... 1-32.03 New Client Acceptance Form, Appendix B (REF-2)................... 1-32.04 Knowledge of Business Form, Appendix B (REF-4).................. 1-33.05 Financial Statement Disclosure Checklist, Appendix E (DC-1) 1-33.06 Technical Review Checklist, Appendix C (REC-6) ..................... 1-33.07 Engagement Partner’s Checklist—Reviewed or Compiled Financial

Statements, Appendix C (REC-7)............................................ 1-34.08 Pre-Release Review Form, Appendix B (REF-12) ...................... 1-34

TOC 1-2 12/15

CHAPTER 1




.10 Routing Instructions for Processing Financial Statements,Appendix B (REF-13) ..................................................... 1-34

131 PRIVACY LAWS ......................................................................................... 1-34.01 Introduction ..................................................................................... 1-34.03 Why Is the Practitioner Concerned with Privacy Laws? ........... 1-35.06 What is Personal Information? ..................................................... 1-35.11 Principles for the Protection of Private Information .................. 1-36.12 Costs of Compliance ...................................................................... 1-37.15 Individuals’ Consent for Collection, Use, and Disclosure of

Personal Information................................................................ 1-37.18 Effect on Practitioner ..................................................................... 1-38

.19 Assurance Engagements.................................................... 1-38

.20 Possible Scope Limitation in Assurance (Review)Engagements.................................................................. 1-38

.21 Non-Assurance Engagements ........................................... 1-38.25 “Privacy Plan” for Practitioners ................................................... 1-39

.26 Reading List for Practitioners ............................................ 1-39

132 QUALITY CONTROL .................................................................................. 1-39.09 Practice Inspection ......................................................................... 1-41.10 Deficiencies Found in Quality Control Procedures ................... 1-41

.11 Review Engagements.......................................................... 1-41

.12 Compilation Engagements ................................................. 1-42.13 Continuing Professional Development ........................................ 1-42

135 APPROVAL OF FINANCIAL STATEMENTS ............................................ 1-42

140 CLIENT BILLINGS ...................................................................................... 1-43

145 PROFESSIONAL LIABILITY INSURANCE ............................................... 1-43

150 LEGAL EXPOSURE IN REVIEW AND COMPILATION ENGAGEMENTS1-43

.02 The Facts ......................................................................................... 1-44

.03 Defensive Measures ....................................................................... 1-44.03 Quality Control ..................................................................... 1-44.04 Professional Liability Insurance ........................................ 1-44

.05 Risk Avoidance and Damage Control.......................................... 1-44

TOC 1-312/15

CHAPTER 1




.06 Risk Avoidance .................................................................... 1-44

.08 Damage Control ................................................................... 1-45.09 Engagement Letters ....................................................................... 1-45

155 OTHER SERVICES ..................................................................................... 1-45.06 Accounting (Bookkeeping), such as Computer-Produced

Records ...................................................................................... 1-46.08 Computerized Financial Statements ............................................ 1-46.12 Assisting Clients to Prepare Financial Statements ................... 1-47.14 Typing and Reproduction Services.............................................. 1-47.15 Processing Financial Data for Clients of Other Accounting

Firms........................................................................................... 1-47.16 Preparing Government Forms ...................................................... 1-48.17 Income Tax Returns ....................................................................... 1-48

160 CONSULTATION ON TECHNICAL AND ETHICAL ISSUES .................. 1-49.02 When and How to Document Consultation................................. 1-49

.04 Consultation Documentation Form ................................... 1-50.05 In-firm Consultation Versus Outside-firm Consultation ............ 1-50

.06 In-firm Consultation ............................................................. 1-50

.09 Outside-firm Consultation .................................................. 1-51.11 Provincial Institutes/Ordre of Chartered Accountants .............. 1-52

165 CURRENT DEVELOPMENTS .................................................................... 1-52.01 Review Engagement Project ......................................................... 1-52.02 Compilation Engagements ............................................................ 1-53.03 Association ...................................................................................... 1-53

TOC 1-4 12/15

CHAPTER 1


Table of Contents

Appendix Description Page No.

1A Rules of Professional Conduct ................................................................ 1-101

1B Association ................................................................................................. 1-103

1C Comparison of Audit, Review and Compilation Engagements ........... 1-105

1D List of Topics Discussed in Auditing and Assurance Publications ... 1-107

[Next page is 1-1]

TOC 1-512/15

CHAPTER 2

REVIEW PROCEDURES

Table of Contents


200 INTRODUCTION.......................................................................................... 2-1.04 Not-for-Profit Organizations .......................................................... 2-1.06 Accounting Principles and Financial Statements ...................... 2-2

205 STANDARDS............................................................................................... 2-2.01 Plausibility ....................................................................................... 2-2.02 General Standards .......................................................................... 2-2.06 Business and Professional Considerations................................ 2-3.11 Withdrawal from an Engagement ................................................. 2-4

210 PLANNING .................................................................................................. 2-5

215 ENGAGEMENT LETTERS ......................................................................... 2-6.02 Why Engagement Letters? ............................................................ 2-7.05 Overcoming Client Resistance ..................................................... 2-8.09 Timing of Engagement Letters ..................................................... 2-9.10 Updating Engagement Letters ...................................................... 2-9.13 Additional Engagement Letter Provisions for Limiting a Firm’s

Liability ....................................................................................... 2-9.14 Requiring the Client to Indemnify the Firm for Any

Third-Party Suits ............................................................ 2-10.15 Release from Claims Because of Management

Representations ............................................................. 2-10.16 Specifying a Time Limitation.............................................. 2-10

220 CHANGE IN TYPE OF ENGAGEMENT .................................................... 2-11.02 Increase in Level of Service .......................................................... 2-11

.03 Comparative Financial Statements.................................... 2-12.04 Decrease in Level of Service from Audit to Review .................. 2-12.06 Documentation ................................................................................ 2-12

225 KNOWLEDGE OF THE BUSINESS .......................................................... 2-12.02 What Level of Knowledge Is Necessary?.................................... 2-12.09 How to Acquire Knowledge of the Business .............................. 2-14

.09 Industry ................................................................................. 2-14

.10 Client ..................................................................................... 2-14

230 PERFORMANCE OF A REVIEW ............................................................... 2-15.02 Professional Judgment Regarding Extent of Procedures ........ 2-15.06 Procedures Not Normally Required ............................................. 2-15

TOC 2-112/15

CHAPTER 2

REVIEW PROCEDURES



235 MATERIALITY AND RISK .......................................................................... 2-16.02 Materiality......................................................................................... 2-16.05 Quantitative Materiality .................................................................. 2-17.31 Qualitative Materiality..................................................................... 2-24.34 Possible Management Abuse of Materiality................................ 2-26.37 Risk ................................................................................................... 2-26

240 INQUIRIES ................................................................................................... 2-27.01 What is Required? .......................................................................... 2-27.07 Illustrative Inquiries ........................................................................ 2-29

245 ANALYTICAL PROCEDURES ................................................................... 2-29.01 Purpose of Analytical Procedures ............................................... 2-29.03 What are Analytical Procedures? ................................................. 2-32.06 Selecting Appropriate Analytical Procedures............................. 2-32.08 Examples of Analytical Procedures ............................................. 2-33

.10 Trend Analysis ..................................................................... 2-34

.11 Reasonableness or Overall Tests ..................................... 2-34

.12 Ratio Analysis ...................................................................... 2-34.15 Developing an Analytical Ratio History ....................................... 2-37.16 Evaluating the Results of Analytical Procedures....................... 2-37.17 When the Results of Procedures Are Unfavourable.................. 2-38.19 Dealing with Differences or Deviations ....................................... 2-38

.20 Deciding when a difference should be investigated....... 2-38

.27 Considering the significance of a difference ................... 2-40

.31 Investigating significant differences ................................. 2-40.36 Limitations of Analytical Procedures........................................... 2-42.37 Analytical Procedures on Initial Engagements .......................... 2-42

250 DISCUSSION............................................................................................... 2-43

255 ADDITIONAL OR MORE EXTENSIVE PROCEDURES ........................... 2-43

257 OVERVIEW OF FINANCIAL STATEMENTS ............................................ 2-44.01 Consider ASPE 1100 ...................................................................... 2-44.03 “General Overall” View .................................................................. 2-44

260 WORKING PAPER DOCUMENTATION .................................................... 2-44.01 Standards......................................................................................... 2-44

TOC 2-2 12/15

CHAPTER 2

REVIEW PROCEDURES



.05 Working Paper Contents................................................................ 2-45

.08 Documenting the Use of Analytical Procedures ........................ 2-46

.09 Conclusion....................................................................................... 2-47

265 REPRESENTATION LETTERS.................................................................. 2-47.08 Illustrative Representation Letter ................................................. 2-49

270 OBTAINING REPORTS FROM OTHER ACCOUNTANTS....................... 2-49

275 COMMUNICATIONS WITH THOSE HAVING RESPONSIBILITY FORFINANCIAL REPORTING ..................................................................... 2-49

280 FINANCIAL INFORMATION OTHER THAN FINANCIAL STATEMENTS—CPA Canada 8500 ............................................................................ 2-50

285 COMPLIANCE WITH AGREEMENTS AND REGULATIONS—CPA Canada 8600 ............................................................................ 2-51

290 REVIEW ENGAGEMENT CHECKLISTS AND FORMS ........................... 2-52.03 Planning Notes to Engagement Form (and Time and Budget

Summary) (Appendix B, REF-3).............................................. 2-52.04 Knowledge of Business Form (Appendix B, REF-4).................. 2-52.05 Review Engagement Checklists (Appendix C, REC-1 and REC-2)

2-52.10 Analytical Procedures Worksheet (Appendix B, REF-8) ........... 2-53.11 Materiality Guideline Worksheet (Appendix B, REF-5) .............. 2-53.12 Schedule of Unadjusted Differences (Appendix B, REF-6)....... 2-53.13 Year End File — Table of Contents (Working Papers)

(Appendix B, REF-7) ................................................................. 2-54

293 STREAMLING ENGAGEMENT TO BECOME MORE EFFECTIVE ANDEFFICIENT............................................................................................. 2-54

295 OTHER REVIEW TOPICS .......................................................................... 2-55.02 Going Concern Matters .................................................................. 2-55.04 Bank Confirmations........................................................................ 2-55.09 Environmental Matters ................................................................... 2-56.10 Legislation ....................................................................................... 2-56.13 Accounting Estimates .................................................................... 2-57

.15 Responsibility for Fraud ..................................................... 2-57

TOC 2-312/15

CHAPTER 2

REVIEW PROCEDURES



Appendix

2B Additional Client Representations........................................................... 2-59

2C Comments on Documentation ................................................................. 2-63

2F Examples of Review Procedures............................................................. 2-69

2G Examples of Follow-up Inquiries to the Review EngagementChecklist Questions in Appendix C (REC-1).......................................... 2-107

TOC 2-4 12/15

CHAPTER 3

REVIEW ENGAGEMENT REPORTS

Table of Contents


300 INTRODUCTION.......................................................................................... 3-1

305 STANDARDS............................................................................................... 3-2.08 Transition to Accounting Standards for Private Enterprises ... 3-4

310 DATE OF REVIEW ENGAGEMENT REPORT.......................................... 3-5

315 ADDRESSEE OF REVIEW ENGAGEMENT REPORT............................. 3-6

320 NEGATIVE ASSURANCE .......................................................................... 3-6

325 RESERVATIONS......................................................................................... 3-7.12 Qualified Report—Departure from Appropriate

Criteria (GAAP).......................................................................... 3-10.17 Adverse Report ............................................................................... 3-12.18 Changes in Accounting Principles............................................... 3-13.20 Qualified Report—Inability to Complete Review ........................ 3-14.23 Denial of Assurance ....................................................................... 3-16.25 Application of Review Engagement Report to the Notes

to the Financial Statements..................................................... 3-18

330 BASIS OF ACCOUNTING OTHER THAN GAAP..................................... 3-19.02 Acceptable Circumstances for Basis of Accounting

Other than GAAP ...................................................................... 3-19.06 Reporting Framework..................................................................... 3-19

.08 Scope Reservations ............................................................ 3-20

.09 Basis of Accounting Reservations.................................... 3-20.10 Examples ......................................................................................... 3-20

.15 GAAP Reservation ............................................................... 3-22

335 REVIEWS OF FINANCIAL INFORMATION OTHER THANFINANCIAL STATEMENTS—Assurance Section 8500.................... 3-25

.03 Reporting ......................................................................................... 3-25

340 REVIEWS OF COMPLIANCE WITH AGREEMENTS ANDREGULATIONS—Assurance Section 8600....................................... 3-29

.03 Reporting ......................................................................................... 3-30

345 OTHER CHANGES TO THE REPORT...................................................... 3-31.01 Comparative Financial Statements............................................... 3-31

TOC 3-112/15

CHAPTER 3

REVIEW ENGAGEMENT REPORTS



.04 Review of Opening Figures ........................................................... 3-32

.05 Additional Information.................................................................... 3-33

348 CHANGES IN ACCOUNTING POLICIES .................................................. 3-33

350 SUBSEQUENT DISCOVERY OF A MISSTATEMENT ............................. 3-33

355 SUBSEQUENT EVENTS ............................................................................ 3-36

360 REPORTS ON SUPPLEMENTARY MATTERS ARISING FROM ANAUDIT OR A REVIEW ENGAGEMENT — CSRS 4400 ..................... 3-37

.01 ..................................................................................................... 3-37

.02 ..................................................................................................... 3-37

.03 ..................................................................................................... 3-37

.04 ..................................................................................................... 3-37

TOC 3-2 12/15

TOC 4-112/10

CHAPTER 4

ILLUSTRATIVE REVIEW WORKING PAPERS

Table of Contents

Section Page No.400 INTRODUCTION .......................................................................................... 4-1410 WORKING PAPERS .................................................................................... 4-2

[Next page is 4-1]

CHAPTER 5

FORM AND PRESENTATION OF FINANCIAL STATEMENTS

Table of Contents


500 INTRODUCTION.......................................................................................... 5-1

505 TITLE PAGE................................................................................................ 5-2.01 General ............................................................................................. 5-2.02 Name of Entity................................................................................. 5-2.03 Title of Financial Statements......................................................... 5-3.06 Date or Period Covered ................................................................. 5-3

510 TABLE OF CONTENTS.............................................................................. 5-4

515 PRACTITIONER’S COMMUNICATION...................................................... 5-4.01 Letterhead ........................................................................................ 5-4.02 Heading ............................................................................................ 5-4.03 Addressee ........................................................................................ 5-4.09 Salutations ....................................................................................... 5-6.10 Signature.......................................................................................... 5-6.11 Date................................................................................................... 5-6

520 BASIC FINANCIAL STATEMENTS ........................................................... 5-7.01 What Are They? .............................................................................. 5-7.02 Approval........................................................................................... 5-7.03 Comparative .................................................................................... 5-7.08 Headings .......................................................................................... 5-8.09 Reference to Practitioner’s Communication ............................... 5-9

.09 Review Engagements.......................................................... 5-9.10 Use of Term “Unaudited” .............................................................. 5-9

.10 Review Engagements.......................................................... 5-9.12 Referencing Notes .......................................................................... 5-10

525 BALANCE SHEET ...................................................................................... 5-10.01 Title ................................................................................................... 5-10.04 Format .............................................................................................. 5-11

530 STATEMENT OF INCOME ......................................................................... 5-11.01 Title ................................................................................................... 5-11.03 Format .............................................................................................. 5-11

535 STATEMENT OF RETAINED EARNINGS ................................................ 5-12.01 Title ................................................................................................... 5-12.02 Combined Statement of Income and Retained Earnings .......... 5-12.1.03 Restatement of Retained Earnings............................................... 5-13

TOC 5-112/15

CHAPTER 5




.04 Separate Statement of Retained Earnings .................................. 5-14

540 CASH FLOW STATEMENT........................................................................ 5-14

545 SIGNIFICANT ACCOUNTING POLICY NOTES ....................................... 5-14.01 When Required? ............................................................................. 5-14.02 What Should Be Included?............................................................ 5-14.03 Manner of Disclosure ..................................................................... 5-15.04 Basis of Presentation ..................................................................... 5-15.05 Other Disclosures ........................................................................... 5-15.07 Sample Disclosures........................................................................ 5-16

550 OTHER NOTES TO FINANCIAL STATEMENTS...................................... 5-16.01 General ............................................................................................. 5-16.03 Format .............................................................................................. 5-16.05 Title ................................................................................................... 5-17.08 Referencing Notes in the Financial Statements ......................... 5-17.09 Content (Disclosure Checklists) ................................................... 5-17

555 SUPPLEMENTARY OR OTHER INFORMATION ..................................... 5-18.01 General ............................................................................................. 5-18.02 Content............................................................................................. 5-18.04 Presentation .................................................................................... 5-19.07 Reporting ......................................................................................... 5-19.08 Schedule Headings......................................................................... 5-19.09 Reference to Communication ....................................................... 5-20

TOC 5-2 12/15

TOC 5-308/12

CHAPTER 5



Section Page No.Description

560 ENTITIES THAT CHANGE FISCAL PERIOD ............................................. 5-20

Appendix

5A Illustrative Financial Statements with ReviewEngagement Report .............................................................................. 5-35

CHAPTER 6

CASH FLOW STATEMENTS

Table of Contents


600 INTRODUCTION.......................................................................................... 6-1.05 Cash Flow Statement Requirement.............................................. 6-1

605 HOW CASH IS DEFINED ........................................................................... 6-1.03 Bank Overdraft (Indebtedness) ..................................................... 6-2.04 Definitions........................................................................................ 6-2.05 Disclosure of Cash ......................................................................... 6-2

.06 Details of Cash Components ............................................. 6-3

.10 Policy of Reporting.............................................................. 6-3

.13 Restrictions........................................................................... 6-4

610 BASIC ELEMENTS ..................................................................................... 6-4.04 Types of Cash Flows...................................................................... 6-4

.05 Income Taxes ....................................................................... 6-6

.06 Cash Flows from Investments using the EquityMethod............................................................................. 6-6

.07 Cash Flows from Joint Ventures Accounted forusing Proportionate Consolidation ............................. 6-6

.08 Business Combinations and Disposals ofBusiness Units ............................................................... 6-6

.09 Cash Flows in Foreign Currencies.................................... 6-6

615 GROSS AND NET CASH FLOWS ............................................................ 6-7.01 Items Reported on a Gross Basis ................................................ 6-7.03 Items Reported on a Net Basis..................................................... 6-7

620 FORMAT CONSIDERATIONS.................................................................... 6-8.02 Analysis of Cash for Reporting Period........................................ 6-8.04 Title ................................................................................................... 6-8.05 Order of Presentation..................................................................... 6-8.06 Captions ........................................................................................... 6-8

625 CASH FLOWS FROM OPERATING ACTIVITIES .................................... 6-9.01 What Is Included? ........................................................................... 6-9.04 What Is Excluded?.......................................................................... 6-9.05 Basic Format ................................................................................... 6-10.07 Direct Method .................................................................................. 6-10.10 Indirect Method ............................................................................... 6-10.15 Which Method Is Better? ............................................................... 6-11.19 Further Considerations for the Indirect Method ......................... 6-12

.19 Changes in Current Assets and Liabilities ...................... 6-12

TOC 6-112/15

CHAPTER 6

CASH FLOW STATEMENTS



.20 Supplemental Information .................................................. 6-12.1

.21 Groupings of Accounts....................................................... 6-12.1

.23 Non-Cash Entries to Current Assets and Liabilities ....... 6-13

630 CASH FLOWS FROM INVESTING ACTIVITIES ...................................... 6-14.04 Capital Expenditures ...................................................................... 6-14.07 Disposal of Capital Assets ............................................................ 6-15.08 Short-Term Investments ................................................................ 6-16.12 Interest and Dividend Income ....................................................... 6-17

635 CASH FLOWS FROM FINANCING ACTIVITIES ...................................... 6-17.04 Cash Dividends ............................................................................... 6-17.06 Withdrawals (Drawings) by Partners or a Sole Proprietor........ 6-17.07 Short-Term and Long-Term Debt.................................................. 6-17.10 Shares Acquired by Company for Cancellation ......................... 6-18

640 NON-CASH INVESTING AND FINANCING ACTIVITIES ......................... 6-19.01 Disclosure ........................................................................................ 6-19

645 REVIEW ENGAGEMENTS ......................................................................... 6-19.02 Documentation ................................................................................ 6-19.04 Practitioner’s Communication ...................................................... 6-20

TOC 6-2 12/15

TOC 7-110/12

CHAPTER 7

UNINCORPORATED ENTITIESTable of Contents


700 INTRODUCTION ......................................................................................... 7-1

705 FINANCIAL REPORTING AND ACCOUNTING ........................................ 7-1.051 Limited Liability Partnerships ......................................................... 7-3.06 Other Bases of Accounting ............................................................. 7-3.07 Review ................................................................................................ 7-3

710 LOANS BETWEEN PARTNERS/PROPRIETOR ANDUNINCORPORATED ENTITY ................................................................ 7-4

.01 Sole Proprietorships ......................................................................... 7-4

.02 Partnerships ...................................................................................... 7-4

.05 Owner’s Salaries and Interest on Invested Capital ...................... 7-5

715 EQUITY SECTION OF BALANCE SHEET ............................................... 7-5.03 Sole Proprietorships ......................................................................... 7-5.06 Partnerships ...................................................................................... 7-6

720 CHANGES IN PARTNERSHIP INTEREST ............................................... 7-7.03 Admission of a New Partner ........................................................... 7-8

.07 Bonus Method ........................................................................... 7-8

.09 Goodwill Method ....................................................................... 7-10

.10 Transactions During the Year ................................................. 7-11.11 Withdrawal or Death of a Partner ................................................... 7-11

.16 Goodwill Method ....................................................................... 7-13.17 Sale of Partnership Interest ............................................................. 7-14

730 COMBINED FINANCIAL STATEMENTS .................................................. 7-14

740 TYPES OF ENGAGEMENTS ..................................................................... 7-14.01 Reviews .............................................................................................. 7-14

CHAPTER 8

INTERIM FINANCIAL REPORTING

Table of Contents


800 INTRODUCTION.......................................................................................... 8-1

805 WHAT ARE INTERIM FINANCIAL STATEMENTS? ................................ 8-1.03 Disclosure ........................................................................................ 8-2.08 Changes in Accounting Estimates ............................................... 8-3

810 INTERIM REPORTING PERIODS .............................................................. 8-4.01 General Application ........................................................................ 8-4.03 Highly Seasonal Business............................................................. 8-5

815 MATERIALITY FOR INTERIM REPORTING ............................................. 8-5

820 RECOGNITION AND MEASUREMENT..................................................... 8-5.01 General Criteria — Revenues and Expenses.............................. 8-5.04 More Specific Guidance on Application ...................................... 8-6

825 RESTATEMENTS........................................................................................ 8-8.01 Reporting Changes in Accounting Policies ................................ 8-8

835 DISCONTINUED OPERATIONS ................................................................ 8-9.02 Financial Statement Disclosure .................................................... 8-10

840 ERROR CORRECTIONS ............................................................................ 8-10.05 Financial Statement Disclosure .................................................... 8-11

845 REVIEW OF INTERIM FINANCIAL STATEMENTS.................................. 8-12.01 Standards and Procedures............................................................ 8-12.03 Materiality and Risk ........................................................................ 8-12.04 Reporting ......................................................................................... 8-13

.05 Reservations......................................................................... 8-13

TOC 8-102/16

CHAPTER 9

RELATED PARTY TRANSACTIONS AND ECONOMIC DEPENDENCE

Table of Contents


900 INTRODUCTION.......................................................................................... 9-1.08 Overview of ASPE .......................................................................... 9-2.10 Variable Interest Entities................................................................ 9-2

905 WHAT ARE RELATED PARTY TRANSACTIONS? ................................. 9-3.01 Definitions........................................................................................ 9-3

910 HOW ARE RELATED PARTY TRANSACTIONS MEASURED?............. 9-4.01 Measurement Issues and Definitions........................................... 9-4.03 Revised Standard ........................................................................... 9-4.05 Carrying Amount............................................................................. 9-4.06 When is Carrying Amount Used?................................................. 9-5.07 Illustration Using Carrying Amount ............................................. 9-5.08 Exchange Amount .......................................................................... 9-6

.15 Leasing Arrangements with Related Parties ................... 9-10.16 Summary — Graphic Illustration of Measurement Principles .. 9-11

920 DISCLOSURE.............................................................................................. 9-13.06 Examples of Note Disclosure........................................................ 9-14

930 ECONOMIC DEPENDENCE....................................................................... 9-16.03 Examples of Note Disclosure........................................................ 9-16.05 Significant Volume of Transactions — But No Economic

Dependence ............................................................................... 9-16.1.06 Examples of Note Disclosure........................................................ 9-16.1

950 REVIEW ENGAGEMENTS ......................................................................... 9-17.01 Review Procedures......................................................................... 9-17.024 Documentation ................................................................................ 9-17.03 Reporting ......................................................................................... 9-18.05 GAAP Reservations........................................................................ 9-18.09 Scope Reservations ....................................................................... 9-19.12 GAAP Reservation — Economic Dependence ........................... 9-20

TOC 9-102/16

CHAPTER 10

SUBSEQUENT EVENTS

Table of Contents


1000 INTRODUCTION.......................................................................................... 10-1

1005 WHAT ARE SUBSEQUENT EVENTS ....................................................... 10-1.02 Type 1 — Subsequent Events....................................................... 10-1.04 Type 2 — Subsequent Events....................................................... 10-1

1010 ACCOUNTING AND FINANCIAL REPORTING........................................ 10-2.01 Type 1 — Subsequent Events....................................................... 10-2.02 Type 2 — Subsequent Events....................................................... 10-2

.05 Going Concern Issues ........................................................ 10-2

1015 SUBSEQUENT EVENTS PERIOD ............................................................. 10-3.01 General Requirement ..................................................................... 10-3.02 Practical Approach ......................................................................... 10-3.03 Inappropriate Approach ................................................................. 10-3

1020 REVIEW ENGAGEMENTS ......................................................................... 10-3.03 Risk-Based Review ......................................................................... 10-3.05 Review Procedures......................................................................... 10-4.07 Documentation ................................................................................ 10-4.09 Review Engagement Reports........................................................ 10-4

.13 GAAP Reservations: Type 1 — Subsequent Events ...... 10-5


.23 GAAP Reservations: Type 2 — Subsequent Events ...... 10-7

TOC 10-102/16

CHAPTER 11

CONTINGENCIES

Table of Contents


1100 INTRODUCTION.......................................................................................... 11-1

1105 WHAT IS A CONTINGENCY? ................................................................... 11-1.01 Definition.......................................................................................... 11-1.03 Three Categories of Contingencies.............................................. 11-2

1110 ACCOUNTING AND FINANCIAL REPORTING........................................ 11-2.01 General Disclosure ......................................................................... 11-2.04 Contingent Losses.......................................................................... 11-3

.05 Likely — Loss Reasonably Determinable ........................ 11-3

.07 Likely — Loss Not Reasonably Determinable ................. 11-4

.08 Outcome Not Determinable ................................................ 11-4

.09 Unlikely.................................................................................. 11-4.10 Contingent Gains ............................................................................ 11-4.14 Going Concern ................................................................................ 11-5.15 Restrictive Debt Covenants........................................................... 11-5.17 Contingencies Resulting From Government Assistance .......... 11-6.18 Guarantees ...................................................................................... 11-6

1115 REVIEW ENGAGEMENTS ......................................................................... 11-6.1.03 Risk-Based Review ......................................................................... 11-7.05 Review Procedures......................................................................... 11-7

.10 No Contingencies Requiring Disclosure .......................... 11-7

.12 Contingencies Disclosed .................................................... 11-8.13 Documentation ................................................................................ 11-8.16 Review Engagement Reports........................................................ 11-8

.20 GAAP Reservation ............................................................... 11-9

.25 Going Concern ..................................................................... 11-10


TOC 11-102/16

CHAPTER 12

CONTRACTUAL OBLIGATIONS — COMMITMENTS

Table of Contents


1200 INTRODUCTION.......................................................................................... 12-1

1205 WHAT ARE CONTRACTUAL OBLIGATIONS? ....................................... 12-1.01 Definition.......................................................................................... 12-1

1210 FINANCIAL STATEMENT DISCLOSURE ................................................. 12-2.01 What Should Be Disclosed? ......................................................... 12-2.06 What Would Not Be Disclosed? ................................................... 12-3.07 Examples of Note Disclosure........................................................ 12-3

.08 Commitments Involving Abnormal Speculative Risk ..... 12-3

.09 Amount of Commitment Is Abnormal in Relation to theEntity ............................................................................... 12-3

.11 Commitments that Affect the Level of Future Activities 12-3

.12 Leases ................................................................................... 12-4.13 Commitments with Related Parties .............................................. 12-4

1215 REVIEW ENGAGEMENTS ......................................................................... 12-4.03 Risk-Based Review ......................................................................... 12-4.05 Review Procedures......................................................................... 12-5

.11 No Contractual Obligations Requiring Disclosure .......... 12-5

.13 Contractual Obligations Disclosed.................................... 12-6.14 Documentation ................................................................................ 12-6.17 Review Engagement Report .......................................................... 12-6

.21 Reservations......................................................................... 12-6


TOC 12-102/16

CHAPTER 13

ACCOUNTING FOR INTERESTS IN JOINT ARRANGEMENTS

Table of Contents


1300 INTRODUCTION.......................................................................................... 13-1

1305 WHAT ARE JOINT ARRANGEMENTS? ................................................... 13-1.02 Definitions........................................................................................ 13-1.06 Other Investments .......................................................................... 13-2.07 Types of Joint Arrangements ....................................................... 13-2

1310 POLICY CHOICES FOR INTERESTS IN JOINT ARRANGEMENTS ...... 13-3.02 Accounting for Joint Operations .................................................. 13-3.03 Accounting for Jointly Controlled Assets ................................... 13-3.04 Accounting for Jointly Controlled Enterprises........................... 13-3.05 Cost method .................................................................................... 13-3.06 Equity method ................................................................................. 13-4.07 Proportion of Assets, Liabilities, Revenue and Expenses........ 13-4

.08 Advantages ........................................................................... 13-4.09 Loss of Joint Control ..................................................................... 13-4

1315 ACCOUNTING FOR AN INVESTOR’S CONTRIBUTIONS TO AJOINT ARRANGEMENT....................................................................... 13-4

.02 Contributions to the joint arrangement at the inceptionof the joint arrangement ............................................... 13-5

.03 Contributions to the joint arrangement subsequent toits inception .................................................................... 13-5

.06 Related Party Transactions ........................................................... 13-5

.08 Statements at Different Dates ....................................................... 13-5

.09 Summary of Changes from ASPE 3055 to ASPE 3056 ............. 13-6

.11 Contributions to a Joint Venture Under Section 3055 .............. 13-6

.12 Accounting for a Venturer’s Contributions to a JointVenture - Section 3055............................................................. 13-6

.13 Recognition of Losses on Disposal of Net AssetsContributed to a Joint Venture .................................... 13-6

.14 Recognition of Gains on Disposals of Net AssetsContributed to a Joint Venture .................................... 13-6

.15 Contributions of Assets to a Joint Venture;Consideration Received is Cash and Other Assets . 13-6

.17 Arm’s Length Transactions ................................................ 13-7.18 Transactions Between a Venturer and a Joint

Venture - Section 3055............................................................. 13-7.18 Sales of Assets by a Venturer to a Joint Venture .......... 13-7.19 Purchases of Assets by a Venturer From a Joint

Venture ............................................................................ 13-7

TOC 13-102/16

CHAPTER 13

ACCOUNTING FOR INTERESTS IN JOINT ARRANGEMENTS



1320 FINANCIAL STATEMENT DISCLOSURE.................................................. 13-7.01 Required Presentations ................................................................. 13-7.02 Required Disclosures ..................................................................... 13-7.07 Accounting Policy Note Examples ............................................... 13-8.08 Explanatory Notes to Financial Statements................................ 13-8

1325 REVIEW ENGAGEMENTS ......................................................................... 13-9.06 GAAP Reservations........................................................................ 13-10.08 Scope Reservations ....................................................................... 13-10

1335 NOT-FOR-PROFIT ORGANIZATIONS ...................................................... 13-11.02 Reporting Methods—Proportionate Consolidation or Equity

Method........................................................................................ 13-11.05 Financial Statement Disclosure .................................................... 13-12.08 Related Party Transactions ........................................................... 13-12.09 Examples of Financial Statement Disclosure ............................. 13-12

TOC 13-2 02/16

CHAPTER 14

COMPILATION PROCEDURES — NOTICE TO READER

Table of Contents


1400 INTRODUCTION.......................................................................................... 14-1.10 Not-for-Profit Organizations .......................................................... 14-2

1405 STANDARDS............................................................................................... 14-2.02 Nature and Terms of Engagement ............................................... 14-3.04 Professional Standards.................................................................. 14-3.05 Withdrawal from an Engagement ................................................. 14-3.07 Notice to Reader ............................................................................. 14-4.08 Business and Professional Considerations................................ 14-4

1410 ENGAGEMENT LETTERS ......................................................................... 14-5.07 Timing of Engagement Letters ..................................................... 14-6.08 Updating Engagement Letters ...................................................... 14-6

1415 CHANGES IN TYPE OF ENGAGEMENT.................................................. 14-7.02 Decrease in Level of Service from Audit or Review to

Compilation................................................................................ 14-7.07 Change from Full Disclosure to Omission of Substantially

All Disclosures .......................................................................... 14-8

1420 COMPILATION PROCEDURES ................................................................. 14-8.01 Basic................................................................................................. 14-8.08 Professional Judgment Regarding Extent of Procedures ........ 14-9.18 Procedures Not Normally Required ............................................. 14-10.23 Knowledge of the Client and Industry ......................................... 14-12.26 Subsequent Events and Contingencies ...................................... 14-13.28 Documentation ................................................................................ 14-13.29 Example of Note Disclosure.......................................................... 14-13.30 Withdrawal from Engagement....................................................... 14-13

1430 SUGGESTED WORKING PAPERS ........................................................... 14-13

1440 FINANCIAL STATEMENT DISCLOSURE AND GAAP ............................ 14-14.11 Income Taxes .................................................................................. 14-16.15 Management .................................................................................... 14-17.18 Final Comment on Possible Misleading Financial Statements 14-18

1445 CHECKLISTS .............................................................................................. 14-18.06 Trial Balance—Preparation Checklist (Appendix D, CEC-1) ..... 14-19.07 Computer-Generated Trial Balance—Preparation Checklist

(Appendix D, CEC-2) ................................................................ 14-19

TOC 14-102/16

CHAPTER 14

COMPILATION PROCEDURES — NOTICE TO READER



.08 Compilation Procedures Checklist (Appendix D, CEC-3) ......... 14-19

1450 PRACTITIONER’S COMMUNICATION — NOTICE TO READER........... 14-19.02 Standards......................................................................................... 14-19.10 Notice to Reader Communication ................................................ 14-22

.16 Incomplete Financial Statements ...................................... 14-24

.17 Independence ....................................................................... 14-25

.23 Date of Notice to Reader .................................................... 14-26

.24 Subsequent Discovery of Error ......................................... 14-26.28 Comparative Financial Statements............................................... 14-27

.29 Other Financial Information................................................ 14-27

1455 FORM AND PRESENTATION OF COMPILED FINANCIALSTATEMENTS....................................................................................... 14-28

.02 Title page ......................................................................................... 14-28

.06 Basic Financial Statements ........................................................... 14-28

.11 Reference to Practitioner’s Communication ............................... 14-29

1456 COMPILATION OF INTERIM FINANCIAL STATEMENTS ...................... 14-30.01 Standards and Procedures............................................................ 14-30.02 Communication ............................................................................... 14-30

1460 EXAMPLES OF OTHER SERVICES AND THE APPLICATION OFCPA Canada 9200 ................................................................................ 14-31

1465 CURRENT DEVELPOPMENTS — COMPILATIONAGREEMENTS...................................................................................... 14-32

TOC 14-2 02/16

CHAPTER 15

COMPILATION OF FORECASTS AND PROJECTIONS

Table of Contents


1500 INTRODUCTION.......................................................................................... 15-1.07 References ....................................................................................... 15-2

1505 DEFINITIONS .............................................................................................. 15-2.02 Future-Oriented Financial Information (FOFI) ............................. 15-2.03 Forecasts and Projections............................................................. 15-2.04 How is FOFI Presented? ................................................................ 15-3.06 Time Period ..................................................................................... 15-3.07 Assumptions ................................................................................... 15-3

1510 GENERAL STANDARDS ........................................................................... 15-3.02 Basic Standards for FOFI Engagement ....................................... 15-3.04 Unresolved Issues .......................................................................... 15-4

1515 FORM AND STYLE OF PRESENTATION ................................................ 15-4.01 “Unaudited — See Notice to Reader”.......................................... 15-4.02 Statement Titles .............................................................................. 15-4.03 Comparative FOFI and Historical Financial Statements ........... 15-4.04 Title Page and Table of Contents ................................................. 15-4.05 Column Headings ........................................................................... 15-5.07 Summary of Disclosures ............................................................... 15-5

1520 ENGAGEMENT LETTER ............................................................................ 15-6.01 AuG-15 Requirement ...................................................................... 15-6

1525 UNDERSTANDING THE ENTITY AND ITS ENVIRONMENT .................. 15-7.03 Sources of Knowledge................................................................... 15-7.04 Level of Understanding.................................................................. 15-7

.05 Deficiencies in Assumptions ............................................. 15-8

.06 Presentation Errors ............................................................. 15-8

1530 COMPILATION PROCEDURES ................................................................. 15-8.02 AuG-16 Procedures ........................................................................ 15-8.05 Letter of Representation ................................................................ 15-9

1535 DOCUMENTATION ..................................................................................... 15-9.03 Contents of Working Paper File ................................................... 15-9

1540 PRACTITIONER’S COMMUNICATION...................................................... 15-10.01 AuG-16.............................................................................................. 15-10

TOC 15-102/16

CHAPTER 15

COMPILATION OF FORECASTS AND PROJECTIONS



.03 Examples ......................................................................................... 15-11

TOC 15-2 02/16

TOC 16-110/12

CHAPTER 16

PERSONAL FINANCIAL STATEMENTS

Table of Contents


1600 GENERAL .................................................................................................... 16-1.04 Personal Financial Statements Guidance ...................................... 16-1.06 Completeness of Information .......................................................... 16-2.07 Type of Engagement ........................................................................ 16-2

1605 ENTITY TO BE COVERED .......................................................................... 16-3.02 Ownership Information ..................................................................... 16-3

1610 BASIS OF PRESENTATION ....................................................................... 16-3.01 Estimated Current Value Basis ....................................................... 16-3.02 Historical Cost ................................................................................... 16-4.05 Cash or Accrual? .............................................................................. 16-4.06 Other Bases of Accounting ............................................................. 16-4

1615 FINANCIAL STATEMENTS ......................................................................... 16-5.01 Balance Sheet ................................................................................... 16-5.03 Statement of Changes in Net Worth ............................................... 16-5.04 Statement of Changes in Cash Resources .................................... 16-5.05 Comparative Financial Statements ................................................. 16-5

1620 CARRYING VALUES OF ASSETS AND LIABILITIES .............................. 16-5.01 Estimated Current Values ................................................................ 16-5.08 Range of Values ................................................................................ 16-9.10 Tax Shelters ....................................................................................... 16-9.12 Potential Tax ...................................................................................... 16-10

1625 DISCLOSURES ............................................................................................ 16-10

1630 PERSONAL FINANCIAL STATEMENTS ENGAGEMENT ......................... 16-11.01 General ............................................................................................... 16-11.02 Acceptance of Clients ...................................................................... 16-11.04 Engagement Letters ......................................................................... 16-12.05 Inadequate Accounting Records/Gathering Information .............. 16-12.09 Personal Financial Statements Worksheet .................................... 16-13.10 Client Representation Letters .......................................................... 16-13

TOC 16-2 10/12

CHAPTER 16

PERSONAL FINANCIAL STATEMENTS



1640 COMPILATION OF PERSONAL FINANCIAL STATEMENTS ................... 16-14.01 Standards and Procedures .................................................... 16-14.05 Communication ....................................................................... 16-14

1645 ILLUSTRATIVE PERSONAL FINANCIAL STATEMENTS ......................... 16-15

Appendix

16A Illustrative Personal Financial Statement with Notice to Reader(“Bare-Bones”) ...................................................................................... 16-17

TOC 17-112/10

CHAPTER 17

ILLUSTRATIVE COMPILATION WORKING PAPERS

Table of Contents


1700 INTRODUCTION .......................................................................................... 17-11705 WORKING PAPERS .................................................................................... 17-2

[Next page is 17-1]

APPENDIX A

CORRESPONDENCE/LETTERS (CL)

Instructions

This Appendix provides samples of the correspondence that is commonly used during review and compilation

engagements. Your firm’s own lettersmay also be added to the Table of Contents andmaintained in this binder.

Professional judgment—Theuseof these sample letters depends on the practitioner’s professional judgment

and each letter should be tailored, where necessary, to meet both the needs of the client and your firm.

Table of Contents

CL-1 Communication with Predecessor ...........................................................................................A-3

CL-2 Illustrative Engagement Letter — Review ...............................................................................A-5

CL-3 Illustrative Engagement Letter — Compilation........................................................................A-9

CL-4 Engagement Letters — Additional Matters............................................................................A-11

CL-5 Illustrative Engagement Letter — Financial Projection .........................................................A-19

CL-6 Illustrative Engagement Letter — Compilation Personal Financial Statements .................A-23

CL-71 Illustrative Representation Letter — Personal Financial Statements...................................A-25

CL-8 Illustrative Representation Letter — Financial Projection..................................................A-26.1

CL-9 Client Billing — Review Engagement ....................................................................................A-27

CL-10 Client Billing — Compilation Engagement.............................................................................A-29

CL-11 Transmittal Letter for Computer-Produced Records and Returning Documents andVouchers .............................................................................................................................A-31

CL-12 Transmittal Letter for Practitioner Acting in the Capacity of a Typing Service Only...........A-33

CL-13 Transmittal Letter for Processing Financial Data for Clients of Other Accounting Firms ...A-35

CL-14 Transmittal Letter for Personal Income Tax Returns............................................................A-37

CL-15 General Transmittal Letter — Drafting Form.........................................................................A-39

CL-17 Journal Entries Approval Form ..............................................................................................A-41

1 For a general representation letter, see Appendices 2A and 2B.

A-102/16

APPENDIX B

REVIEW ENGAGEMENT FORMS (REF)

Instructions

This Appendix provides various forms that can be used for review engagements as discussed in this Guide.

Some firms, however, maymodify some of these forms also for compilation engagements. Any other forms that

your firm uses may also be added to the Table of Contents and maintained in this binder.

Professional judgment—The use of these forms depends on the practitioner’s professional judgment. Forms

should be tailored, where necessary, to meet the needs of the engagement.

For those forms that are updated and carried forward annually, the original may be removed from the prior year

working paper file before making any changes, and replaced with a photocopy.

Table of Contents

REF-1 Firm Policies .............................................................................................................................B-3

REF-2 Engagement Acceptance Form .............................................................................................B-11

REF-3 Planning Notes — Review Engagement ...............................................................................B-17

REF-4 Knowledge of Business Form .............................................................................................B-20.1

REF-5 Materiality Guidance Worksheet ............................................................................................B-29

REF-6 Schedule of Unadjusted Misstatements ................................................................................B-31

REF-7 Year End File — Table of Contents ......................................................................................B-33

REF-8 Analytical Procedures Worksheet ..........................................................................................B-35

REF-9 Consultation Documentation Form ........................................................................................B-39

REF-10 Personal Financial Statement Preparer’s Worksheet ...........................................................B-41

REF-12 Pre-Release Review Form .....................................................................................................B-53

REF-13 Routing Instructions for Processing Financial Statements ...................................................B-57

REF-14 Staff and Partners Acknowledgement of Independence ......................................................B-59

B-102/16

APPENDIX C

REVIEW ENGAGEMENT CHECKLISTS (REC)

Instructions

This Appendix provides checklists for review engagements as discussed in this Guide starting with a general review engagementchecklist and continuing with specialized checklists for specific circumstances and types of financial statements. Any otherchecklists that your firm uses may also be added to the Table of Contents and maintained in this binder.

Professional judgment—The use of these checklists depends on the practitioner’s professional judgment. Checklists that areused should be tailored, where necessary, to meet the needs of the engagement.

Table of Contents

REC-1 Review Engagement Checklist (general) ................................................................................C-3

REC-2 Introduction to Supplementary (or Specialized) Review Engagement Checklists ...............C-11

REC-2a Revenue Recognition .............................................................................................................C-13

REC-2b Cash Flow Statement .............................................................................................................C-17

REC-2c Related Party Transactions and Economic Dependence .....................................................C-19

REC-2d Interests in Joint Arrangements .............................................................................................C-21

REC-2e Subsequent Events ................................................................................................................C-25

REC-2f Contingencies .........................................................................................................................C-27

REC-2g Contractual Obligations ..........................................................................................................C-31

REC-2h Financial Instruments .............................................................................................................C-33

REC-2i Derivative Instruments............................................................................................................C-37

REC-2j Goodwill and Other Intangible Assets ...................................................................................C-39

REC-3 Review Engagement Report Checklist ..................................................................................C-43

REC-4 Not-for-Profit Organizations....................................................................................................C-45

REC-5 Interim Review Engagements ................................................................................................C-47

REC-6 Technical Review Checklist ...................................................................................................C-55

REC-7 Engagement Partner’s Checklist............................................................................................C-57

C-102/16

D-112/10

APPENDIX D

COMPILATION ENGAGEMENT CHECKLISTS AND FORMS (CEC)

Instructions

This Appendix provides checklists and forms for compilation engagements as discussed in this Guide.Any other checklists and forms that your firm uses may also be added to the Table of Contents andmaintained in this binder.

Professional judgment — The use of these checklists and forms depends on the practitioner’s pro-fessional judgment. Checklists and forms that are used should be tailored, where necessary, to meetthe needs of the engagement.

Table of Contents

CEC-1 Preparation Checklist — General .............................................................................. D-3

CEC-2 Preparation Checklist — Computer-Generated Trial Balance ................................... D-5

CEC-3 Compilation Procedures Checklist ............................................................................. D-9

CEC-4 Compilation Procedures Checklist — Forecast and Projection Engagements ....... D-11

CEC-5 Supplementary Compilation Procedures Checklist Personal FinancialStatements ............................................................................................................ D-15

E-112/10

APPENDIX E

FINANCIAL STATEMENT DISCLOSURE CHECKLIST (DC)

Table of Contents

DC-1 Presentation and Disclosure Requirements for Financial Statements Prepared under Ca-nadian Accounting Standards for Private Enterprises ................................................ E-3