Documents Required for a Compilation Engagement

The compilation engagement documents required by any Canadian CPA firm come down to one essential item and six supporting groups. The essential item is a closed, reconciled trial balance. Everything else — bank records, receivable and payable listings, payroll filings, loan agreements, capital asset invoices, and last year’s statements — exists to support the numbers on it.

Send a complete package the first time and the engagement moves. Send it in pieces and it stalls, because a compilation cannot be assembled from information that is still changing. Here is exactly what to gather, and why each item is on the list.

A compilation engagement assembles financial information that management provides. Your CPA does not test balances or confirm them with your bank — under CSRS 4200 the work is assembly, not verification, and no assurance is expressed. That places the burden of completeness squarely on the records you hand over.

CSRS 4200 also requires your CPA to have knowledge of your business and to document the work properly. That is why the list runs past a trial balance: the supporting records are what make the compiled statements defensible and the basis of accounting note accurate.

Start here, because nothing else can be used until this is settled.

Your CPA needs a closed trial balance for the fiscal year, in balance, with the opening balances agreeing to last year’s compiled statements. Alongside it, provide the general ledger detail so any unusual balance can be traced to the transactions behind it.

If you work in QuickBooks Online or Xero, direct access is usually simpler than exporting, because it lets your CPA see the detail behind a number without a round of emails. Please confirm the year is actually closed before sending — a trial balance that shifts after it arrives restarts the work.

Every balance on the balance sheet that came from an outside institution needs its year-end statement attached.

Provide year-end bank statements with completed reconciliations for every account, including any account you rarely use. Do the same for credit cards. For every loan or line of credit, send the agreement and the year-end balance or amortization schedule, so the split between current and long-term portions is right and the interest expense can be checked against the statements.

Unreconciled accounts are the single most common reason a compilation slows down. If the book balance does not agree to the statement, every figure built on it is uncertain.

These three are where the year-end cut-off is either right or wrong.

Send an accounts receivable aged listing at year-end that totals to the balance in your books, and flag anything you consider uncollectible. Send an accounts payable aged listing on the same basis. If you carry stock, provide your year-end inventory count and valuation, along with the method you used.

Please make sure each listing agrees to the trial balance before sending. A subledger that does not tie to the control account is a question your CPA has to ask, and every question costs days.

Payroll touches both the income statement and the liabilities, so the filings need to agree with the books.

Provide your payroll register or year-end summary, the T4 slips and T4 Summary filed for the year, and your PD7A remittance statements. Include any T4A or T5018 slips issued to contractors or subcontractors. On the sales tax side, send the GST/HST returns filed for the year and the year-end balance owing or refundable.

Where a remittance was filed but not paid, or paid but not posted, the liability on your balance sheet will not match the government’s record — and that gap has to be resolved before the statements can be finalized.

These are the items most often forgotten, and the ones most likely to trigger follow-up questions.

For anything bought or sold during the year, send the purchase and disposal invoices so additions are capitalized correctly and depreciation can be calculated. Provide lease agreements for vehicles, equipment, and premises. And provide the detail behind the shareholder loan account — the draws, the repayments, and the dates.

The shareholder loan is the balance a lender and the CRA both look at on an owner-managed corporation. When personal costs have run through the business accounts, each one has to be identified and reclassified before the balance sheet can be compiled.

A compilation is rarely a standalone year. It has to connect to what came before.

Send last year’s compiled financial statements, so the comparative figures and opening balances agree. Send the prior-year T2 return and the Notice of Assessment, which confirm what the CRA has on record and carry forward the tax accounts. If your corporation was incorporated, amalgamated, or changed its share structure during the year, include the corporate records covering the change.

Please also tell your CPA who will read the statements. Under CSRS 4200, knowing the intended user shapes the engagement and the disclosure, so it is a question best answered at the start rather than the end.

An incomplete package does not simply delay the work — it changes the work.

When the trial balance is not closed, the engagement has not started, whatever the calendar says. When reconciliations are missing, the job becomes a bookkeeping clean-up before it can become a compilation, which is a longer and more expensive exercise. When supporting records arrive in batches, your CPA rebuilds context each time, and the questions multiply.

There is a records obligation behind all of this too: the CRA requires business records to be kept for six years after the end of the tax year they relate to. The documents on this list are not just for your CPA — they are the file you would need if the CRA ever asked.

The compilation engagement documents required are not arbitrary. Each group on the list supports a figure on the statements, and the trial balance sits under all of it. Close the year, reconcile every account, confirm each listing ties, gather the supporting records, and send one complete package.

Do that and a compilation is a straightforward engagement. Skip it and you are paying a CPA to do bookkeeping.

If you would like the checklist applied to your own year-end, please book a free consultation with Gondaliya CPA. We will tell you what is missing, what it will take, and quote a flat fee, HST included, in writing before any work starts — call 647-212-9559 or email info@gondaliyacpa.ca. Our CPA compilation report service covers the whole engagement.