Blog Post 10: What Is a Compilation Engagement, and Do You Need One?

If your accountant has ever mentioned a “compilation engagement” or “Notice to Reader,” you might have wondered what it is — and whether it’s something your business actually needs. Let’s break it down in plain English.

What Is a Compilation Engagement?

A compilation is the most basic type of financial statement engagement that a CPA can provide. It’s when we, as accountants, take the financial information you provide and format it into formal financial statements. There’s no audit or review of the numbers — we don’t verify accuracy or assess risk.

You’ll often hear it referred to by its old name: Notice to Reader (NTR).

What’s Included?

In a compilation engagement, we’ll:

  • Organize your income, expenses, assets, and liabilities
  • Present it in proper financial statement format
  • Include a CPA-prepared compilation report (but no assurance)
  • Help you meet basic year-end compliance needs

It does not include verifying receipts, performing testing, or providing any opinion on your financial health.

When Is It the Right Fit?

A compilation is ideal if:

  • You need financial statements for tax filing
  • You’re managing your business internally and don’t have external reporting requirements
  • No one (like a lender or investor) is asking for reviewed or audited statements

In other words, it’s a cost-effective way to meet minimum requirements for small businesses, sole proprietors, or holding companies.

When Is It Not Enough?

You’ll want to consider a review or audit if:

  • A bank or lender requires a higher level of assurance
  • You’re applying for a government grant
  • You need to demonstrate credibility to investors or partners
  • Your business is growing and you want a stronger financial oversight process

Why Work With a CPA?

Only a licensed CPA can prepare a proper compilation engagement under CSRS 4200, the Canadian standard for these reports. While it’s the lowest level of assurance, it still needs to meet a professional standard — and that’s where our expertise matters.

Need Help With Year-End Financials?
 We’ll take your raw financial data and prepare clean, professional statements that meet compliance standards — without overcomplicating the process.

Let’s make your year-end stress-free.