Reviews and Compilations – Project Status
• March 2010 – IAASB to consider issues
paper and task force proposals
• June 2010 – IAASB first read of exposure
draft (prior to next IESBA meeting)
• September 2010 – IAASB approve exposure
draft
Review Engagements
• IESBA discussed at October 2009 meeting
• IAASB is of view that current provisions of
the Code regarding practitioner’s
involvement with client’s accounting records
and financial statements are appropriate
Compilation Engagements
• IAASB discussed at December 2009 meeting
– Independence not required for a compilation
engagement
– Practitioner’s report should state independence is
not required
Compilation Engagements
• Task Force has developed draft requirements
– Users want to know factors that impact
practitioner’s ability to be objective
– Report should disclose existence of any
significant interests or relationships which
practitioner believes are of interest to the users
Task Force Draft Requirements
• The engagement team shall comply with
relevant ethical requirements relating to
compilation engagements
• The engagement partner shall take
responsibility for the engagement team’s
compliance with the relevant ethical
requirements in individual engagements
Task Force Draft Requirements
• The practitioner's report shall contain…
– A statement that independence, as described in the
IESBA Code for assurance engagements, is not
required to perform a compilation engagement
– Disclosure of the existence of any significant
interests or relationships the practitioner has with the
entity that the compiled information relates to, that
the practitioner believes are of interest to the
intended users of the compiled financial information
Independence - Code
• Section 290 contains independence
requirements for audit and review
engagements and 291 requirements for other
assurance engagements
• Compilations are not an assurance
engagement
• Compilations are not explicitly addressed in
the Code
Clarification needed?
• Points indicating no need
– Existing compilation standard does not require
independence but requires practitioner to
disclose if not independent
– Only a few respondents to IESBA strategy
survey stated IESBA should address
– Revised ISRS can contain the guidance
Clarification needed?
• Points indicating need
– Code does not explicitly say independence is not
required
– Practitioners need guidance on types of
interests or relationships that need to be
disclosed
– Without guidance practitioners may look to
Section 290 or 291 – self-review threat not as
relevant in a compilation engagement
Approaches to clarification
• Revise Code
– Project proposal
– Exposure Draft
– Revision would be in Code
• Interpretation
– Faster
– Should not interpret or clarify the meaning
• Staff Q&A
– Non authoritative
– Not with the Code