Hi All,
As you may be aware, that new “standard 4200” is going to be effective November 2021 and this covers assurance and compilation services .
As I read & understood preparing & filing T2 tax return by itself is exempt from the this standard, however, if we issued to our clients F/S with NTR letter then it becomes a compilation engagement and here the 4200 come into rule.
My question: for the time being I only accept T2 tax filing and I am avoiding issuing F/S with NTR not to be deemed providing compilation BUT when it comes to S141, I have to tick I am professional (CPA) and then I will be forced to choose (Audit / Review / compilation) so I tick compilations even though I am not compiling.
Appreciate your thoughts why CRA views CPAs for every T2 they are filing as if they had completed completed compilation.
Further, do you think with the new standard - compilation engagements (bank requested with NTR) will require CPA with PAL?
Like you, I do T2’s and avoid issuing any NTR communication. Not sure if this CRA really cares about this issue…the form should be tweaked for sure.
I recently transitioned from ProFile to TaxCycle and had always just been able to sign off the warning re: leaving the boxes in part 3 blank. I did tick part 1 & 4 boxes & never had a problem or query from CRA…
CRA: " Part 2 – Type of involvement with the financial statements The third option in this part, “conducted a compilation engagement,” is intended for accountants who do not have the appropriate level of accounting designation to technically choose the second option, “completed a review engagement report,” but have exercised some sort of review of the corporation’s books.
If the accountant does not have a professional designation, he or she does not have to complete Parts 2 and 3."
" Part 4 – Other information You may have situations where the tax return and financial statements were prepared by different persons or the financial statements were not prepared. If you have a professional designation and are not the accountant associated with the financial statements in Part 1, choose option 1 or 2 of line 110."
.
.
Line 110 choice 2 is the weird one.
It is IMPOSSIBLE to prepare a T2 return properly with zero Financial Statements…
IMHO Line 110 choice 2 basically says “Please Audit me, CRA”
.
Presumably one is not willy-nilly preparing T2 tax returns being wilfully blind to the contents of the financial statements prepared by others, but rather one is exercising “some sort of review of the corporation’s books”…
