This overview is not a replacement of the Standard and therefore should be used in conjunction with, and not instead of, the Standard.

Objective

APES 315 Compilation of Financial Information (PDF) sets out mandatory requirements and guidance for members in public practice who undertake compilation engagements. The Standard also encourages application to engagements to compile non-financial information.

Scope and application

APES 315 took effect on 1 January 2010 and was revised in February 2015 and March 2017. It requires members in public practice in Australia to adhere to its mandatory requirements when they compile financial information. Members in public practice outside Australia, must follow the requirements of APES 315 as long as local laws and/or regulations do not prevent them from doing so. The revised Standard applies to engagements commencing on or after 1 July 2017.

Activities that fall outside the scope of the Standard include preparation of a taxation return and financial information prepared solely for inclusion in the tax return, analysis of figures provided by the client to report to the client, relaying of information to the client without collection, classification or summarisation of the information and assurance engagements.

Fundamental responsibilities of members

APES 315 requires members to observe and comply with their public interest obligations when they perform a compilation engagement. The Standard also reminds members of their professional obligations established in APES 110 Code of Ethics for Professional Accountants, Section 130 – Professional Competence and Due Care.

APES 315 states that independence is not a requirement for a compilation engagement, however, where the member is not independent disclosure is required in the compilation report.

Procedures

Depending on the terms and nature of the compilation engagement, APES 315 requires the member to obtain a sufficient understanding of the client’s business, its operations, and accounting principles and practices. Procedures such as verification of relevant matters or information, assessment of internal controls, and assessments of reliability, accuracy and completeness of information provided are not required unless the member has reason to believe information supplied by the client includes a misstatement. If the client refuses to provide further information required to address any potential misstatements, the member should refer to the firm’s policies and procedures established in accordance with APES 32 Quality Control for Firms in determining whether to continue acting for the client.

Reporting on a compilation engagement

A member must issue a compilation report where:

  • the member’s or firm’s name is identified with the compiled financial information
  • external parties other than the intended user can associate the member with the compiled financial information, and there is a risk that the level of the member’s involvement with the information may be misunderstood
  • the intended user may not understand the nature and scope of the member’s involvement
  • the compiled information is required under applicable law or regulation, or it is required to be publicly filed.

Where the member compiles financial information for internal use only by a client, the member should issue an accountant’s report disclaimer, and on each page of the compiled financial information include a reference to the fact that the information is restricted for internal use only and should be read in conjunction with the accountant’s report disclaimer.

Where a member issues a compilation report in relation to financial statements prepared in accordance with a regulation or contract, the member shall describe in the compilation report the purpose for which the financial statements are prepared or refer to a note in the financial statements that contains that information.

Mandatory elements to be included in a compilation report are:

  • a title of the report, and the addressee
  • a statement that the engagement is performed in accordance with the Standard
  • if applicable, a statement that the member is not independent from the client
  • identification of the compiled financial information, and if applicable, noting that it is based on the financial information provided by the client
  • the basis of any forecast information and key assumptions (applicable to prospective financial information only)
  • a statement that the client is responsible for the financial information compiled by the member
  • a statement that neither an audit nor a review has been carried out and that no assurance is expressed on the compiled financial information
  • if a member is reporting on the compilation of SPFS, a statement to that effect as well as stating the specific purpose for which the SPFS have been prepared, and that the SPFS are only suitable for the purpose they have been prepared and may not be suitable for any other purpose
  • the date of the compilation report, the member’s or firm’s name, address and signature
  • an appropriate disclaimer of liability
  • a description of the responsibilities of the client in relation to the compilation engagement, and in relation to the financial information.

Refer to the Standard for information concerning

  • Scope
  • Application
  • Objectives
  • Definitions
  • Public interest
  • Professional competence and due care
  • Confidentiality
  • Planning
  • Applicable financial reporting framework
  • Documentation and quality control
  • Responsibility of the client
  • Communication of significant matters
  • Subsequent discovery of facts
  • Decision trees to determine whether an engagement is a compilation engagement
  • When a compilation report should be issued
  • Examples of an engagement letter
  • Compilation reports
  • Accountant's report disclaimer