Before accepting a compilation engagement

What a firm should weigh before accepting a compilation under ISRS 4410 (Revised): purpose, users, basis, integrity, records and the right service.

By Achekam · 11 October 2026 · 4 min read · For Accountants & audit firms in South Africa, Nigeria, Kenya

Compilations are often treated as the easy end of a practice's work, accepted over the phone and priced from last year's invoice. Most of the trouble that follows a compilation, from the client who expected an audit to the bank that relied on figures nobody checked, can be traced back to that first conversation.

Acceptance is where a firm decides whether it can do the work properly, for a client it can trust, for a purpose the work actually serves. This article walks through what to consider before agreeing, and the signs that the right answer is no.

What ISRS 4410 (Revised) clarifies about acceptance

The IAASB's 2012 news release on the revised compilation standard states that ISRS 4410 (Revised) clarifies the matters that need to be considered when accepting compilation engagements, and that it emphasises the importance of quality control in compilation work. The IAASB's news release on the enhanced compilations standard explains why the board revised the standard with smaller entities in mind.

The message is that a compilation is a professional engagement with its own acceptance discipline, not a bookkeeping job with a cover page. The questions below follow from that.

Purpose, users and the basis of accounting

Start with three questions, and write the answers down:

• What is the compiled information for? A bank facility renewal, a grant claim, a tax return, a shareholder dispute, the owner's own use.
• Who will read it, and what will they assume? A lender reading compiled statements may treat them as more reliable than they are.
• On what basis will it be prepared? Is a framework mandated, and if not, which basis would suit those users?

IFAC explains that ISRS 4410 (Revised) requires the practitioner to have sufficient understanding of both the entity and the basis of accounting to advise the client if the selected basis is inappropriate. That understanding is easiest to build before acceptance, when the firm can still decline or reshape the work without awkwardness.

The client's integrity and the state of its records

ACCA explains that under ISQM 1 firms must assess the integrity and ethical values of a client and its management, and their own ability to perform the engagement within legal and professional requirements, and must not let financial and operational priorities lead to inappropriate acceptance or continuance decisions. ACCA adds that existing relationships should be reassessed each year before reappointment.

For a compilation, that assessment usually turns on practical evidence:

• Why did the client leave its previous accountant, and will the previous accountant say so?
• Are the records in a state that can be compiled within the time and fee, or will the firm be reconstructing a year of transactions?
• Has management been straightforward in the first meeting, or vague about bank accounts, loans and related businesses?
• Does the firm have the people and the time to do the work properly when the client wants it?

"We need the fee" is exactly the financial priority ISQM 1 warns against letting drive the decision.

Does the client need a compilation at all?

Sometimes the purpose calls for a different service. A lender may require reviewed or audited statements; a funder may want agreed-upon procedures on specific grant spending; a buyer may want due diligence; the client may only need bookkeeping and a tax return. Accepting a compilation when the user needs assurance sets everyone up for disappointment, and puts the firm's name on work that will be read as more than it is.

Ask the client to show you what the bank, funder or authority actually asked for. If the request says "audited" or "reviewed", the answer is not a compilation, whatever the client would prefer to pay for.

Recording acceptance in Achekam

In Achekam, a firm records a client acceptance review after a conflict check against its own clients and contacts, and only a signed-in partner can approve it. Be clear about what the screen does and does not do: customer due diligence is a tick-box confirmation by the preparer, and Achekam runs no automatic FICA, CIPC or sanctions check. The identity work happens outside the system, and the confirmation in the review should reflect checks that were actually performed. The client acceptance and conflict check covers the review in more detail.

Once accepted, the engagement letter sets the terms. Achekam's AI can draft a letter's clauses, never its fees, and a person saves the draft; Achekam will not send a letter whose wording breaks the professional guardrails. Its rule that a partner must review a letter before it is sent applies to audits and reviews; for compilations, many firms still choose to have a partner read the purpose, users and basis paragraphs before the letter goes out, because those are the paragraphs that protect the firm later.

Red flags that mean decline

Some answers should end the conversation:

1. Management will not say who the compiled information is for.
2. The intended user needs assurance, and the client wants a compilation to avoid paying for it.
3. The client asks the firm to present compiled figures as reviewed or audited, or to leave out the compilation report.
4. The records are so incomplete that the firm would effectively be inventing the figures.
5. The client has already been refused by another firm and will not explain why.
6. Management pushes for a basis of accounting that would mislead the intended users.
7. The firm lacks the time or skills to finish the work properly by the client's deadline.

Declining is uncomfortable, but it costs less than resigning halfway through, or defending a compilation that a bank treated as an audit. For the standard as a whole, see compilation engagements under ISRS 4410. Time spent on these questions at the start is the cheapest risk management a practice has.

General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.