The Auditing and Assurance Standards Board (AASB) proposes, subject to comments received following exposure, to issue:
- a new Canadian Standard on Related Services (CSRS) 4250, Compilations Engagements on Future-oriented Financial Information and Pro Forma; and
- limited consequential amendments to CSRS 4200, Compilation Engagements.
Proposed CSRS 4250 would replace Assurance and Related Services Guideline (AuG) 16, Compilation of a Financial Forecast or Projection. Proposed CSRS 4250 covers compilation engagements on:
- future-oriented financial information that may be a forecast or a projection; and
- pro forma.
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In developing proposed CSRS 4250, the AASB attempted to address the following key public interest considerations:
- Confusion among practitioners about the applicability of AuG-16, resulting in inconsistencies in its use and the prescribed communication.
- Lack of a current standard for the performance and reporting requirements related to compilation engagements on pro forma.
- Confusion regarding the appropriate level of work effort and documentation in a compilation engagement under AuG-16. On one hand, too little work effort may lead to association with potentially misleading information. On the other hand, too much work effort may drive up costs unnecessarily.
- Significant developments in relevant professional standards that make AuG-16 outdated, such as:
- The AASB issued CSRS 4200, effective for periods ending on or after December 14, 2021.
- The Accounting Standards Board removed Part V of the CPA Canada Handbook – Accounting, which included Section 4250, Future-oriented Financial Information. The content from Section 4250 is now non-authoritative guidance (called Future-oriented Financial Information).
- The AASB issued the Canadian Standards on Quality Management, effective for related services engagements as of December 15, 2023.
Learn more about key features in proposed CSRS 4250 that aim to address public interest considerations. Read the AASB’s Exposure Draft, “Proposed CSRS 4250, Compilation Engagements on Future-oriented Financial Information and Pro Forma,” for background information and an explanation of the proposed standard.
Drop us a line. If you would like to arrange a call to discuss our proposals directly, please reach out to AASB Principal Amalia Spensieri, CPA, CA, by phone at +1 416 204 2965, or via email at [email protected].