CA Pawan is engaged by M/s RK Industries, a partnership firm to compile its financial statements for the past two financial years. During…

CA Final · Advanced Auditing, Assurance and Professional Ethics · PYQS · May 2026
CA Pawan is engaged by M/s RK Industries, a partnership firm to compile its financial statements for the past two financial years. During performance of the engagement, CA Pawan, was not satisfied with certain significant adjustments made to inventory valuation over the years. The matter was subsequently resolved after obtaining appropriate clarifications from the management. Further, at the completion stage, CA Pawan, has provided the final compiled statements along with the compilation report to M/s RK Industries. You are required to explain the documentation requirements that should be adhered to by CA Pawan for this type of engagement.

Suggested Answer and Working Notes:

As per SRS 4410 “Compilation Engagements”, the practitioner shall include in the engagement documentation: Significant matters arising during the compilation engagement and how those matters were addressed by the practitioner;A record of how the compiled financial information reconciles with the underlying records, documents, explanations and other information, provided by management; andA copy of the final version of the compiled financial information for which management or those charged with governance, as appropriate, has acknowledged their responsibility, and the practitioner's report. The practitioner may consider also including in the engagement documentation a copy of the entity's trial balance, summary of significant accounting records or other information that the practitioner used to perform the compilation.

Topics: Standard on Auditing (SA)

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