Professional Engagement Guide (PEG)
Author: CPA Canada
Members of the Ordre des CPA du Québec who wish to use a Corporate Passport or the CPA Promo to pay for an annual subscription to this tool must order directly through the Ordre des CPA du Québec’s Website. Note that an annual subscription grants a basic licence for 5 users.
This is the fourth edition of the Professional Engagement Guide (PEG). The PEG is designed to provide practical step-by-step guidance for practitioners and their staff to perform assurance and compilation engagements relating primarily to small and medium-sized entities.
This guide also promotes consistent application of the Canadian Auditing Standards and the Other Canadian Standards (review engagements, compilation engagements and compliance engagements) included in the CPA Canada Handbook – Assurance, Post-auditor Reporting.
This publication was created to help practitioners achieve the following:
- Conduct high-quality, cost-effective small and medium-sized entity assurance and compilation engagements in compliance with professional standards.
- Inform, educate and train professional accountants and students;
- Better serve the public interest.
What's new in 2020?
Significant changes this year include the following:
- Compilation Engagements, CSRS 4200 – (New Section – Knotia only):
- A new section was created for all resources related to the new compilation engagements standard This includes a new chapter in Volume 1 (Chapter 45), new chapters in Volume 2 (Chapters 35 – 38) and practice aids (including checklists, reports, and letters). The standard takes effect for compiled financial information for periods ending on or after December 14, 2021, with early application permitted.
- Practice Aids and FRF forms:
- Major changes have been made to various forms to include the new requirements from revised CAS 540, Accounting Estimates and Related Disclosures.
- Moderate changes have been made to practice aids as well as the Financial Reporting Framework (FRF) forms to reflect the changes to the ASPE standards relating to Section 3856, Financial Instruments.
- Volume 1 and 2:
- Updates in both volumes reflecting the changes made to CAS 540, Auditing Accounting Estimates and Related Disclosures.
- On Knotia, the introduction chapters have been separated out as a stand-alone section. Additionally, the volumes are provided as a PDF, making searching for individual topics easier.
- Volume 3: Case Studies (New Section - Knotia only):
- Case studies have been reorganized to provide easy access to the material. Grouped by audit and review each case study includes written explanations along with the related filled-in forms.
New Practice management, Advisory, Compilation and Tax Guide (PACT)
CPA Canada has developed a new a resource called the PACT. The PACT has been developed with sole practitioners and small- to medium-sized practices in mind to help them and their staff perform compilation, tax and various advisory services, as well as provide guidance on practice management topics. The PACT will be available as a subscription only at CPA Canada. For further informations, click here.
Notice to Québec CPAs
CPAs should note that the Professional Engagement Guide (PEG) is developed by CPA Canada and that some documents must be adapted to take into account Québec regulations. Québec members who subscribe to the Professional Engagement Guide (PEG), may access free of charge, sample letters in which some text has been crossed out to highlight excerpts that must be removed in order to comply with Québec regulations. To access these letters, follow the links in the sample letters of the PEG.
Furthermore, CPAs interested in the questionnaires and checklists presented in the PEG can purchase the following tools from the Order.
- Programme d’audit – Entreprises à capital fermé
- Programme d’audit – OSBL
- Programme – Mission d’examen
- Programme – Mission d’examen - OSBL
- Programme – Mission de compilation
- Programme - Mission de conformité
- Audit program – Private enterprises
- Audit program – NFPOs
- Review engagement program
- Review engagement program - NFPOs
- Compilation engagement program
- Compliance engagement program
Volume 1 — Core Concepts
This volume outlines some of the key concepts addressed in the assurance standards. It includes chapters on matters such as how to determine materiality, understand internal control, determine significant risks, and perform risk assessment procedures and further audit procedures. Volume 1 also contains the key concepts involved in a review engagement, a compilation engagement and a compliance engagement.
Volume 2 — Practical Guidance
Volume 2 contains step-by-step guidance to help practitioners perform audit, assurance and compilation engagement as outlined below.
A practical three phase, 12-step approach is provided on how to perform audit engagements efficiently and in accordance with the Canadian Auditing Standards. Many chapters also contain illustrative audit documentation based on a medium-sized entity (Cambridge Furniture Inc., Case Study A) and a very small entity (Kennedy & Co., Case Study B).
A practical three phase, six-step approach is provided on how to perform review engagements efficiently and in accordance with the requirements of the Canadian Standard on Review Engagements (CSRE 2400). A case study (PureLife Inc.) has been included to illustrate the documentation requirements contained in the standard.
A practical three-step approach is provided for completing efficient compilation engagements in compliance with OCS 9200.
A practical approach is provided on how to perform compliance reporting engagements with the requirements of Canadian Standards on Assurance Engagements (CSAE) 3530, Attestation Engagements to Report on Compliance, and CSAE 3531, Direct Engagements to Report on Compliance. These standards are effective for reports dated on or after April 1, 2019.
The practice aids consist of a number of Word and Excel templates which can be downloaded in total or by particular form. These templates consist of engagement forms, checklists and sample letters designed to help practitioners ensure engagement completeness, consistency and effectiveness. These templates should be customized as necessary for the industry, the specific engagement requirements and the circumstances of the particular entity.
Also included as part of the practice aids are the publications entitled Model Financial Statements – Private Enterprises and Model Financial Statements – Private sector NFPOs in PDF.
The complete collection of practice aids is accessible online. Please log into your Knotia account to access the guidance and templates available as part of this guide.
Get the most up-to-date information with the online version of PEG, available on Knotia.ca. Linked, and fully searchable, the Knotia format provides you with online access to the guidance you need. Note that Knotia houses the official version of PEG. In order to ensure that subscribers receive the most current information relating to engagements in Canada, the Knotia version will be updated throughout the year as changes and additional resources become available.
PRINT AND KNOTIA
Get the best of both worlds with the PEG print/Knotia combo. This cost-effective package combines the value of the two-volume print set with the ease and search capabilities of the Knotia online version.
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