Financial Statement Compilations
Lowest Level of Assurance (None)
Compilation services are offered to assist your accounting department in the preparation of your financial statements in accordance with professional standards. A compilation involves obtaining information from management in an effort to prepare financial statements without expressing any assurance that the statements are fairly presented or about the underlying information in the statements.
The objective of a compilation of financial statements is to assist management in presenting financial information in the form of financial statements without providing any assurance that there are no material modifications that should be made to the financial statements.
We improve the quality of the compiled financial information by helping clients present it in accordance with GAAP, an other comprehensive basis of accounting (OCBOA), or other applicable reporting framework. Although our report does not explicitly provide assurance, the fact we assisted helps provide assurance to decision makers.
The compilation, by formatting information in a standard format, allows you to evaluate your company's performance and allows us to highlight and recommend ways to enhance your organization's operations.
The CPA issues a report stating the compilation was performed in accordance with Statements on Standards for Accounting and Review Services; and that the accountant has not audited or reviewed the financial statements and accordingly does not express an opinion or provide any assurance about whether the financial statements are in accordance with the applicable financial reporting framework.
In compiling financial statements for a client, we present information that is the "representation of management" and expresses no opinion or assurance on the statements. Compilations don't require inquiries of management or analytical procedures. Instead, we rely on our knowledge of accounting principles and a general understanding of your business.
Banks often require compilations from an independent CPA as part of their lending covenants.