Modernizing Compilation Engagements in Canada: Standards, Competition and the Public Interest

Canada’s framework for compilation engagements is undergoing significant modernization. In 2021, the long-standing “Notice to Reader” model under Section 9200 of the Canadian Accounting Standards Handbook was replaced by the Canadian Standard on Related Services (CSRS) 4200, governing compilation engagements involving historical financial information. That change reshaped how non-assurance financial statements are prepared and communicated. The evolution continues with the development of proposed CSRS 4250, addressing future-oriented financial information and pro forma reporting.

These developments are more than technical revisions. They represent a structural recalibration of Canada’s non-assurance reporting landscape. For the Auditing and Assurance Standards Board (AASB), an arm’s-length body responsible for setting these standards, the goal has been clear: closer alignment with international standards, clearer distinctions between assurance and non-assurance engagements, and stronger public confidence in financial reporting where no assurance opinion is provided.

The new Compilation Engagement Report also provides greater clarity to accounting practitioners, financial institutions and the public by distinguishing what falls under provincially regulated public accounting legislation and what remains outside provincial regulation. In Canada, Chartered Professional Accountants (CPAs) and Registered Professional Accountants (RPAs) have adopted these standards, and accounting practitioners adhere to them when preparing compilation engagements.

As an experienced Registered Professional Accountant (RPA) and Certified Accounting Practitioner, I had the opportunity to participate in the AASB’s field-testing group for CSRS 4250. The process highlighted that even non-assurance standards are developed through rigorous consultation and practical testing. Questions of proportionality, documentation and professional judgment are examined carefully before standards are finalized. Non-assurance does not mean unstructured.

From Notice to Reader to a Modern Framework

For decades, compilation engagements were governed by Section 9200, commonly known as the Notice to Reader. While widely used, the framework was brief and minimally prescriptive. Documentation requirements were limited; engagement acceptance procedures were loosely defined and reporting language sometimes created confusion about the practitioner’s role.

Internationally, the International Auditing and Assurance Standards Board (IAASB) modernized its compilation framework through ISRS 4410 (Revised), introducing clearer engagement acceptance requirements, structured documentation expectations and improved reporting transparency. The AASB concluded that Canada’s model required similar modernization.

CSRS 4200 therefore introduced explicit engagement acceptance procedures, required practitioners to obtain knowledge of the entity and its accounting system, mandated documentation of significant professional judgments and standardized reporting language emphasizing that no assurance is provided. It also requires disclosure of the basis of accounting.

The result is a more structured and transparent framework without converting compilation engagements into assurance services. By clarifying responsibilities and reporting language, the standard helps reduce the expectation gap between what users assume accountants do and what compilation engagements involve.

The Next Stage: CSRS 4250

With historical compilations modernized, attention has shifted to forward-looking financial information. In September 2024, the AASB issued an exposure draft of proposed CSRS 4250, intended to replace the outdated AuG-16 guideline with a stand-alone standard aligned with CSRS 4200.

The proposal addresses forecasts based on best-estimate assumptions, projections based on hypothetical assumptions and pro forma financial information showing the effects of transactions as if they had occurred at a specific date. The framework clarifies scope, definitions and practitioner responsibilities.

Engagement acceptance requirements are strengthened, particularly where third-party use is anticipated. Practitioners must inquire about the intended use of the information, obtain acknowledgment of the basis of accounting and ensure that third parties can obtain additional explanation if required.

Although no assurance opinion is provided, practitioners must still obtain sufficient knowledge of the entity and review the compiled information to determine whether it appears misleading. If concerns arise, they must address them with management or withdraw from the engagement.

Required disclosures include the basis of accounting, significant assumptions and explicit caution that actual results may differ materially from projections. The proposal also integrates documentation requirements and quality-management expectations aligned with modern Canadian professional standards.

Standards as a Public Good

The modernization of standards reflects broader governance reforms. The Independent Review Committee on Standard Setting in Canada (2023) concluded that accounting and assurance standards constitute a public good, with CPA Canada serving as steward rather than owner.

If standards are public goods developed in the public interest, their legitimacy rests on transparency, sound governance and accessibility. Their purpose is to enhance reliability and comparability in financial reporting, not to serve as instruments of market exclusivity.

Ontario’s Balanced Regulatory Model

Ontario’s regulatory framework demonstrates how public protection and market access can coexist.

When the Public Accounting Act, 2004 was amended in 2021 following the introduction of CSRS 4200, the government intentionally preserved subsection 2(3). This provision allows accountants who do not hold an assurance licence, including RPAs and CPAs without such licences, to perform compilation engagements, provided that the engagement includes an assurance disclaimer and complies with CSRS 4200.

In 2024, the government reaffirmed that this approach continues to function effectively for consumers of accounting services. The model is risk-based: assurance engagements remain restricted, while non-assurance compilation services operate within an inclusive professional framework.

Competition and Economic Productivity

Economic research supports this balanced approach. In 2026, research commissioned by the Competition Bureau and published in the International Productivity Monitor examined the impact of restrictive regulation in professional services.

Using OECD Product Market Regulation indicators, the study found that Canada’s regulatory framework, particularly entry requirements and exclusive rights over certain activities, is more restrictive than in leading OECD jurisdictions. Such restrictions can limit competition and reduce efficiency in upstream sectors such as accounting that support the broader economy.

Importantly, the study also found that several OECD countries have eased comparable restrictions without evidence of reduced service quality. Ontario’s inclusive framework for compilation engagements, allowing participation by qualified professionals including CPA and RPA members, reflects this calibrated regulatory approach.

The study estimates that pro-competitive reforms in upstream sectors, with professional services among the largest contributors, could generate long-term GDP gains of approximately 6.5 to 10 per cent, as businesses benefit from lower costs and improved access to expertise.

A Coherent Policy Framework

Canada’s transition from Section 9200 to CSRS 4200 and now toward CSRS 4250 demonstrates the maturation of non-assurance financial reporting. Even where no opinion is expressed, disciplined professional standards matter.

A coherent framework therefore requires clear standards, transparent reporting, legislative protection for assurance services and competitive access to structured non-assurance services. It must also support small businesses, which deserve affordable, accessible and reliable services from designated accounting professionals including CPAs and RPAs alike.

Public protection and competition are not opposing principles. When properly designed, they reinforce one another.