Compilation engagement (NV COS 4410): what software does and does not do
Software speeds up compiling: processing, classifying, presenting and recording. The judgement, the conversation with the client and the compilation report stay with the accountant.
The short answer
In a compilation engagement under Standard 4410, an accountant helps the board to prepare and present the annual accounts under Title 9 Book 2 DCC, based on the client's information. Software supports processing and presenting. The professional judgement, the file building and the compilation report remain the accountant's responsibility.
The revised Standard 4410 has applied since 1 January 2016 (Accountant.nl). It applies to accountants: RAs and AAs who are on the NBA register.
What Standard 4410 requires, step by step
The standard follows the engagement from acceptance to report. The table sets the main requirements next to what software can do.
| Part of the standard | What the accountant does | What software can support |
|---|---|---|
| Engagement letter (par. 25) | Records the arrangements before the work: intended use, framework, scope, responsibilities and the form of the report. | A template to fill in and keep. The content remains your agreement with the client. |
| Knowledge of the entity (par. 28) | Obtains sufficient knowledge of the activities, the accounting system and the applicable framework. | Master data, legal form, size class and last year's figures together. |
| Compiling (par. 29–31) | Uses the client's records and explanations, discusses significant judgements with the board and reads whether the whole fits what he knows. | Reading in the trial balance, classification into line items, comparative figures and a draft following the statutory models. |
| Incomplete or misleading information (par. 32–35) | Brings signals to the board, asks for additions or correction and withdraws from the engagement if necessary. | Signals, such as a balance sheet that does not balance or a missing mandatory section. No judgement. |
| Documentation (par. 38) | Records significant matters, the reconciliation with the records and the final annual accounts with the board's acknowledgement. | Versions of the trial balance, comments per section, approvals and an audit trail. |
| Compilation report (par. 40) | Issues a report with the prescribed components and signs it. | Nothing: the report is the accountant's. |
Standard 4410 par. 25par. 28–31par. 32–35par. 38par. 40
The compilation report: what it contains
Paragraph 40 of the standard prescribes the components of the report. These include a title, the addressee, the statement that the financial information has been compiled, the responsibilities of the board and the accountant, the framework applied and the identification of the compiled information. Also a description of the engagement, the date, the accountant's signature and their place of establishment.
The NBA makes sample texts available via the Verklaringengenerator (report generator), for members and non-members, with a separate variant for micro-entities. The sample text states that the accountant compiled the annual accounts based on the client's information, and that as a final step they checked globally whether the picture fits their knowledge of the entity. The sentence that no audit or review procedures were performed is optional in the sample text.
The NBA says it itself: when compiling, "the accountant in principle does not examine whether this information is correct" (explanation of the compilation report). That is precisely why the file must show what has been done.
What Jaarrekening.io does in a compilation engagement
- A template 'Engagement letter compilation engagement (Standard 4410)' that you fill in and keep in the file as a PDF. The template itself says: only for accountants, compare with the current NBA sample letter.
- Reading in and classifying the trial balance, with comparative figures and a check whether debit and credit balance.
- A draft of the balance sheet, profit and loss account and notes under Title 9 Book 2 DCC, with AI drafts for text sections that are marked as AI-generated.
- Separation between preparer and checker, comments per section and an internal file approval. The platform expressly states that this approval is not an adoption.
- A version history of the trial balance, so that it stays visible which figures the draft rests on.
In the Client management module, an annual accounts engagement also has a work programme with, among others, the steps 'Engagement letter signed', 'Review (four eyes)' and 'Discussion with the client and approval'. Client management is currently not yet in the app menu. If you want to use the module, please contact us; the amounts for the modules you can add are on the pricing page.
What software cannot and may not do
- The judgement whether the picture given by the annual accounts matches your knowledge of the client (par. 31).
- The conversation with the board about significant judgements, such as estimates and the choice of accounting policies (par. 30).
- The decision to withdraw from the engagement if the board does not correct misleading information (par. 35).
- Issuing and signing the compilation report. Jaarrekening.io does not generate that text.
An AI draft for the notes is a draft. It only becomes part of the annual accounts once someone has reviewed it. The amounts come from fixed calculation rules, not from the language model.
Compiling, reviewing or auditing
| Engagement | Standard | Assurance | When |
|---|---|---|---|
| Compilation | Standard 4410 | No assurance; no opinion on true and fair view | Voluntary, often for micro and small |
| Review | Standard 2400 | Limited assurance | Voluntary, for example at the request of a financier |
| Audit | Standards 200–899 | Reasonable assurance | Mandatory for medium-sized and large (art. 2:393 DCC) |
You can read more about the difference under compilation and audit reports and audit requirement.
Frequently asked questions
Is a compilation report mandatory?
No. The law only requires medium-sized and large entities to have an audit (art. 2:393 DCC). A compilation report is a choice of the client, often because a bank or shareholder asks for it.
Who may issue a compilation report under Standard 4410?
An accountant who is on the NBA register: an RA or AA. The title accountant is protected (art. 41 Wab, the Dutch Accountancy Profession Act). Bookkeeping firms that are members of the NOAB work with their trade association's own models; that is not an accountant's report.
Can AI write the compilation report?
The text is largely standard, but the signature means the accountant has performed the work and takes responsibility for it. Jaarrekening.io does not generate a compilation report; use the NBA sample text.
Must the engagement letter be in writing?
Yes. Standard 4410 requires the agreed terms to be recorded before the work in an engagement letter or another written agreement (par. 25).
Must the client approve the compiled annual accounts in writing?
The standard does not prescribe a separate written confirmation at the end, but the accountant must record that the board acknowledges the annual accounts (par. 38). In practice this is done with an approval or the board's signature.
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