CCAB released a cross-profession accounts compilation report in September 2009. The proposed report was drafted by a staff group of five professional accountancy bodies (ACCA, CIMA, ICAEW, ICAI and ICAS). The project was undertaken in response to a POBA (Professional Oversight Board for Accountancy) recommendation.
Background
Professional Oversight Board (POB, previously POBA as above) recommended in its report entitled Review of how accountants support the needs of small and medium-size companies and their stakeholders that, among other things, the involvement of professional accountants in accounts compilation should be clearly explained in the associated accountant’s report. Furthermore, it recommended that the CCAB bodies should consider the use of a cross-profession compilation report to enhance users’ understanding.
In response, CCAB bodies convened a staff group to look at drafting an accounts compilation report which may be used by professional accountants who are CCAB members in public practice. The group consulted both APB and POB staff in its considerations. The proposed report is subject to review and approval process within each professional body. The ICAEW and ICAI are now seeking further member feedback on the proposed CCAB accounts compilation report.
CCAB Accounts Compilation Report
The proposed CCAB accounts compilation report comprises core paragraphs recommended to be present in all voluntarily produced CCAB accounts compilation report and optional paragraphs, which accountants may wish to use to facilitate better communication with the users of the CCAB accounts compilation report. Optional paragraphs primarily relate to risk management and the respective responsibilities of directors and accountants.
The existing technical guidance M41 Chartered Accountants' Reports on the Compilation of Financial Statements of Incorporated Entities (ICAI) and Audit 02/04 Chartered Accountants' Reports on the Compilation of Financial Statements of Incorporated Entities (ICAEW), and related illustrative reports remain effective. However, members may choose to use the new CCAB accounts compilation report in place of the existing illustrative reports in M 41/Audit 02/04 should they wish to do so.
The new CCAB accounts compilation report with all core and optional paragraphs included is broadly consistent with that of M 41 and Audit 02/04.
The proposed CCAB accounts compilation report also uses web links. This is to ensure that the report remain clear and concise while still providing users access to information on the ethical and other professional requirements of accountants. Such information, if incorporated within the report would make it disproportionately long and would detract from the purpose of the accounts compilation report.
The use of the report remains voluntary. Accordingly, there is no requirement for companies to use professional accountants to help compile accounts or to obtain an accounts compilation report.
Process
The CCAB bodies have each undertaken various consultations to date. The ICAEW and ICAI are seeking additional member feedback on the CCAB accounts compilation report over the next three months. Feedback will be used to inform how the accounts compilation reports are generally used in practice as well as to gain member views on the proposed report.
The CCAB staff group will remain in place to monitor developments in this area at the International Auditing and Assurance Standards Board and will consider any implications for this report.