What the accountant does and does not do
In a compilation, the accountant takes your records and presents them as financial statements, such as a balance sheet and an income statement, often with basic notes. The work generally relies on the information you supply. The accountant does not audit or validate the figures and does not express an opinion on whether they are accurate.
Some accountants add helpful steps along the way, such as some vetting of the figures, breaking down expenses or drafting basic notes. These extras vary, so confirm what your engagement includes rather than assuming.
A simple illustrative example
Suppose a small Ontario corporation keeps its bookkeeping current and needs year-end statements for its own use and for tax filing. Its accountant compiles the statements from the ledger and the year-end schedules. The cover page makes clear that the statements were compiled, not audited or reviewed. The figures here are illustrative only.
If the same company later asks a bank for a larger loan, the lender may ask for more than a compilation. That does not mean the earlier statements were wrong. It means the lender wants a higher level of comfort than a compilation provides.
Where it fits among the three engagement types
A compilation is the lightest of the three. A review engagement adds enquiry and analysis and gives limited assurance, and an audit gives the highest level of assurance. A compilation can suit smaller or less complex businesses, can help you see where the business stands before a decision, and is sometimes accepted by financial institutions, although some lenders ask for more.
Because nothing is tested, a compilation is only as reliable as your bookkeeping. Unreconciled bank accounts, missing receipts or unclear owner transactions will carry straight into the statements.
What to discuss with your accountant
Ask what the engagement covers, which records the accountant expects, and who will read the statements. If a lender, buyer, investor or shareholder agreement is involved, ask what level of engagement they require before you commit to one. Ask how adjusting entries, notes and tax schedules are handled, and whether bookkeeping cleanup is a separate step.
Bring your reconciled ledger, bank and loan statements, a list of receivables and payables, and last year’s statements. Compiled statements do not replace the records the CRA expects you to keep.
Sources & editorial notes
Sources checked October 24, 2026. The examples are illustrative and provide general information. Discuss how the guidance applies to your circumstances with your accountant.
- BDC: Audited, accountant-reviewed and notice-to-reader financial statementsBusiness Development Bank of Canada
- BDC: What are financial statements?Business Development Bank of Canada
Rules and guidance can change. Use the current official source and confirm the treatment for your facts. To flag an error, contact Sora.