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Business Integrity, Insight and Beyond
Compilation Engagement
• Recap of Review Engagement and FAQ• Practical look at the Compilation Engagement
Agenda
FAQs on Review
• Can I still prepare the financial statements?• Is that all?
- (I don’t feel comfortable with so little evidence)• Which standard do we use?• What is a review going to cost?• Who can do the review?• Group statements if subsidiaries were not
audited?
FAQ on Companies Act
• Calculation of PI Score• Section 45 Assistance• Section 90 Auditor appointment
- Same firm?- Secretarial work?- If previously appointed?
• Changing the MOI for voluntary audits• Deadline for preparing AFS
Business Integrity, Insight and Beyond
• What is a compilation? • When? • Who?
Compilation Engagement
Case study• Internal Bookkeeper up to Trial
Balance• Service revenue
- R7,8m (2010: R7,3m)- Automatically invoiced 7 days
before service delivery
2011 2010
Employees 10 9
Third party debt R387 529 R372 752
6 Directors100%
Trylon40%
OHS
MD60%
Private companies - Assurance
Audit Audit Audit Audit
None Audit Review Audit
None None Review Review
Independently compiled
Internally compiled
Independently compiled
Internally compiled
Owner managed Not owner managed
PIScore
350
100
0
Private companies – Who will do it ?
Registered Auditor (RA)
RA RA or CA(SA) RA
Not applicable RA or CA(SA) or CC accounting officer
Independently compiled
Internally compiled
Independently compiled
Internally compiled
Owner managed Not owner managed
PIScore
350
100
0
The Review ProcessKnowledge of the business
Enquiry
AP
Areas that are likely to be misstated
Focused enquiry
Focused AP
Areas that may be misstated
Additional enquiries
Additional procedures
Receivables processing
Processing
•General ledger
Closing entries
•Trial balance
Importing, mapping
•Draft financial statements
Compilation
•Accounting policies, notes, disclosures
•Financial statements
Audit / Review
•Annual financial statements
Are invoices
captured?
Should any invoices be accrued / deferred?
Is mapping correct?
Are related parties
identified?
Are debtors recoverable?
Section 29(6)
Section 29(6)
• (6) Subject to section 214 (2), a person is guilty of an offence if the person is a party to the preparation, approval, dissemination or publication of – (a) any financial statements, including any annual
financial statements contemplated in section 30, knowing that those statements –(i) Fail in material way to comply with the requirements of
subsection (1); or(ii) Are materially false or misleading, as contemplated in
subsection (2); or
Receivables processing
Processing
•General ledger
Closing entries
•Trial balance
Importing, mapping
•Draft financial statements
Compilation
•Accounting policies, notes, disclosures
•Financial statements
Audit / Review
•Annual financial statements
Are invoices
captured?
Should any invoices be accrued / deferred?
Is mapping correct?
Are related parties
identified?
Are debtors recoverable?
When your name is on the front page you take risk
You can’t afford to miss anything
You have to rely on others in the process
Compliant AFS need reliable records
Evidence of work performed (CYA)
You asked for guidance
Give you the best solution
Why a compilation template?
• Comply with compilation standard - ISRS 4410
• Risk management - Companies Act
• Integration- Between compiler and auditor / reviewer
• Process- Cover everything- It must work the way you work
Compilation objectives
Receivables processing
Processing
•General ledger
Closing entries
•Trial balance
Importing, mapping
•Draft financial statements
Compilation
•Accounting policies, notes, disclosures
•Financial statements
Audit / Review
•Annual financial statements
Are invoices
captured?
Should any invoices be accrued / deferred?
Is mapping correct?
Are related parties
identified?
Are debtors recoverable?
Compilation
Audit / review
Closing entries
Processing
Mapping
Receivables processing
Annual Financial
Statements
Are invoices
captured?
Should any invoices be accrued / deferred?
Is mapping correct?
Are related parties
identified?
Are debtors recoverable?
Probe MMXProbe Compilations
Processing
•General ledger
Closing entries
•Trial balance
Importing, mapping
•Draft financial statements
Compilation
•Accounting policies, notes, disclosures
•Financial statements
Audit / Review
•Annual financial statements
Receivables processing
Are invoices
captured?
Should any invoices be accrued / deferred?
Is mapping correct?
Are related parties
identified?
Are debtors recoverable?
Make it work
• Firm template• Compilation, review and audit working papers
Standardise
• Pre-planning• Planning• Finalisation
Partner involved
• Team• Compiler• Accountant• Client staff• TCWG
Communicate
Make it work
• ISA / ISRE / ISRS• IFRS / IFRS for SMEs• Companies Act
Know the standards
Specialise
Work at the client
Charge everything
• Group audits- ISA 600
• IFRS for SMEs - Audit & Compilation
• Updates on What’s happening- Facebook & Twitter
Next steps
Thank you
ProBeta Accountancy Development (Pty) [email protected]
ProBeta.Accountancy #ProBetaAccProbe MMX #Probe User
+27 (11) 886-1395 +27 (21) 910-2766
