Working papers for compilations

Question:
For notice to reader do we have to prepare working papers for all accounts or just the assets and liabiltiies.  Do we have review the accounts.  For notice to reader is just taking the numbers and putting in the financials format and not audited or verify.

Answer:
I know that there is always dissention about this topic. This is always the question, how much work is too much work? I'm going to answer it obliquely and hope you understand that there is a difference between doing work for tax and doing work for accounting.

If you are preparing a tax return, then you need to document your work for tax return preparation, it's not about the financial statements at all, it's about preparation of schedules, and the return(s).

There is always confusion about whether you are doing work for tax or work for financial statement preparation. I side with doing tax work, as that's what most clients are hiring you for, especially when it's compilation, as that's what will likely bite back if it's not done correctly.  There is no test in the Income Tax Act for determination of materiality. That's an accounting test. In the Income Tax Act the test is reasonability and business purpose.

Ask any accountant and they will each have their own answer.  Feel free to post yours below.  I'd love to hear them.