Notice to Reader vs compilation engagement: what actually changed
The Notice to Reader is gone: CSRS 4200 replaced it for year-ends on or after Dec 14, 2021. What changed, what banks expect now, and what to send your lender.
The Notice to Reader no longer exists. For fiscal periods ending on or after December 14, 2021, it was replaced by the compilation engagement under CSRS 4200, the current Canadian standard for CPA-prepared financial statements without assurance. The service fills the same role — annual financial statements for your corporation, prepared by a CPA, with no audit and no review — but the report attached to your statements, the notes inside them and the work behind them all changed. If your bank still asks for a "notice to reader," the compilation engagement report is what you send. Here is what changed, why, and what it means for your corporation.
Same job, new standard
Under the old standard — Section 9200 of the CPA Canada Handbook, essentially unchanged since 1987 — a CPA would assemble your year-end financial statements and attach a short "Notice to Reader": two sentences warning that the statements had not been audited or reviewed and might not be appropriate for the reader's purposes. That notice gave the whole product its everyday name.
The problem was the gap between theory and reality. Notice to Reader statements were designed for management's own use, yet banks and other lenders relied on them every day to make credit decisions. In February 2020, the Auditing and Assurance Standards Board issued CSRS 4200, Compilation Engagements, effective for fiscal periods ending on or after December 14, 2021. Since that date, no CPA in Canada can issue a Notice to Reader.
What changed concretely
The report attached to your statements
The two-sentence notice was replaced by a compilation engagement report that spells out who is responsible for what. Management — you — is responsible for the underlying information and for choosing the basis of accounting. The practitioner is responsible for compiling that information in accordance with CSRS 4200 and with the relevant ethical requirements. The report still says plainly that no assurance is expressed. One visible simplification: the old habit of stamping "unaudited" on every page is no longer required.
A required note on the basis of accounting
This is the change you will notice inside the statements themselves. Compiled financial information must now include a note describing the basis of accounting used to prepare it — for example, a cash basis; a cash basis with selected accruals and estimates such as amortization and income taxes; or a basis specified by a creditor or regulator. Under the old rules, a reader had no way of knowing how the numbers were put together. Now it is written down, and your banker reads that note.
More work before the numbers
CSRS 4200 also formalized what happens behind the scenes. Your CPA must obtain knowledge of your business and accounting system, document how the statements were compiled, discuss significant estimates with you, and cannot ignore information that appears false or misleading — if it cannot be corrected, the CPA must withdraw from the engagement. A signed engagement letter is required. And the standard only covers financial statements: bookkeeping on its own, or figures compiled solely to fill out a tax return, such as the GIFI schedules of your T2, do not trigger a compilation report. None of this turns a compilation into an audit; it turns it into a documented, consistent product rather than an informal one.
What banks expect now
Lenders were a driving reason for the new standard, and it addresses them directly. When compiled statements are intended for a third party such as a bank, the CPA can only accept the engagement if that third party is in a position to request further information from management, or has agreed with management on the basis of accounting. For a typical operating loan or credit line, your bank can always pick up the phone and ask questions, so the condition is normally met — but your accountant now has to ask who uses your statements before starting the work. That question is not curiosity; it is a requirement.
Most Canadian lenders updated their document checklists long ago: they now ask for compiled financial information or a compilation engagement report, and their credit teams expect to find the basis-of-accounting note.
"My bank still asks for a notice to reader — what do I send?"
Send your compiled financial information with its compilation engagement report. Some loan templates and account-manager emails still use the old vocabulary out of habit, not because the document still exists. The compilation engagement report is the direct successor and contains strictly more information than the notice it replaced, so lenders accept it in its place. If a form has a "notice to reader" checkbox, check it and attach your compilation. One caution: if your lender specifically requires a review engagement or audited statements, that is a different request entirely — it will say "review" or "audit," never "notice to reader."
What it means for cost and effort
A CSRS 4200 compilation involves more documented work than a pre-2021 Notice to Reader: understanding the business, supporting the basis-of-accounting note, discussing estimates, keeping a file that stands up to professional inspection. Across the industry, that moved compilation fees up from the old Notice to Reader era. In exchange, you get statements that state clearly how they were prepared — which is exactly what the third parties reading them needed.
At Stamped, compilation engagements start at $2,900, prepared by CPAs and delivered through our platform, with answers to your questions within 24 hours. See our compilation service for what is included.
Do you need a compilation at all?
For most incorporated small businesses, the compilation is the default choice: it answers routine lender requests at the lowest cost. Some situations call for more — a loan covenant that requires a review engagement, outside shareholders, or a business sale. Take two minutes with our assurance level calculator, or compare the three engagement types in our guide to compilation, review and audit.
Frequently asked questions
Is a Notice to Reader the same as a compilation engagement?
They are two generations of the same no-assurance service. The Notice to Reader was governed by Section 9200 of the CPA Canada Handbook; for fiscal periods ending on or after December 14, 2021, CSRS 4200 replaced it with the compilation engagement, which adds a detailed engagement report and a mandatory note describing the basis of accounting.
Can my accountant still issue a Notice to Reader?
No. For any fiscal period ending on or after December 14, 2021, Canadian CPAs must follow CSRS 4200 and issue a compilation engagement report instead. A document titled Notice to Reader covering a recent year-end would not comply with current standards.
Does a compilation engagement provide any assurance?
No. Like the old Notice to Reader, a compilation provides no assurance: the CPA compiles the financial information provided by management without auditing or reviewing it. If a lender requires assurance, you need a review engagement or an audit instead.
Will my bank accept a compilation engagement report instead of a Notice to Reader?
Yes. The compilation engagement report is the direct successor to the Notice to Reader and contains more information, notably the basis-of-accounting note. If a bank form still says notice to reader, send your compiled financial information with its compilation engagement report.
How much does a compilation engagement cost?
Across the industry, more than the old Notice to Reader, because CSRS 4200 requires documented knowledge of the business, a basis-of-accounting note and a fuller working file. At Stamped, compilation engagements start at $2,900.