Compilation Statement Accounting Services
Compilation statement accounting services involve preparation of financial statements with no assurance. We simply take your financial information and present it in the form of a financial statement. Compilation engagement procedures include:
– Learning the accounting principles and practices common to the industry.
– Learning about the organization’s transactions and recording practices.
– Compiling the financial statements and ensuring that they are appropriate in form and free of obvious errors.
A compilation is typically performed when a higher level of service on the financial statements is not required by outside parties or others.
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.
Financial statement compilations are accounting services to assist the management of a business in presenting its financial statements. A compilation does not require Schultz, Wood & Rapp, P.C. to perform any procedures to obtain any assurance that there are no material modifications needed for the financial statements to be in conformity U.S. generally accepted accounting principles or another comprehensive basis of accounting. Thus, our Certified Public Accountants do not use inquiries, analytical procedures, or review procedures, nor do we need to obtain an understanding of internal controls, or engage in other audit procedures. Compilations are not designed to provide any assurance regarding the information contained within the financial statements.
Compilations are less expensive than the more in-depth forms of attestation services (the other two being Reviews and Audits), and so it is preferred by those cost-sensitive entities whose financial statement users are comfortable with this form of engagement. However, because there is no assurance that compiled financial statements fairly present the results and financial position of a business, a compilation is not preferred by lenders and creditors.
Each type of financial statement report may suit specific circumstances, depending on requirements from your client’s bank or other parties, as well as meet budgetary needs. Understanding each report’s unique strengths and weaknesses can help you choose the most appropriate one. Please call if you have questions about which type of report is right for you.