Compilation of Financial Statements

In a compilation service the CPA simply presents, in the form of financial statements, the client’s financial data and does not provide any assurance.

The CPA is required to read the financial statements in light of the financial reporting framework being used and consider whether the financial statements appear appropriate in form and are free from obvious material misstatements. The compilation report states that the CPA did not audit or review the financial statements and accordingly does not express an opinion, a conclusion or provide any assurance on them. As opposed to an audit and review service, the CPA does not have to be independent as long as the CPA discloses the impairment to their independence in their compilation report.

A compilation is typically appropriate when initial or lower amounts of financing or credit are sought or there is significant collateral in place. Though no assurance is provided, outside parties may appreciate your association with a CPA, which is readily apparent in the formal compilation report.

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