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Compiled financial statements are occasionally required by entities such as banks or state regulatory agencies. These statements closely resemble those prepared by an in-house controller of a larger company, offering a familiar format for those used in corporate financial reporting. Included in these statements is a CPA’s report, which demonstrates the organization’s association with a CPA firm. However, unlike in an audit or a review, a compilation report will state that the CPA is not expressing an opinion or conclusion on the financial statements because they did not perform a review or an audit.
In a compilation engagement, we do not generally test financial records or systems for accuracy, but we do help organize the financial data into a standard, professionally formatted statement. This process requires the CPA to understand the client’s business and accounting system. The main goal of a compilation is to help management present their financial information in a structured and standardized manner, which is useful both internally and externally.
For small to medium-sized organizations, which might not have extensive resources for in-house financial reporting, compiled financial statements are particularly helpful. Often, grant writers, banks, or other financial statement users will allow smaller organizations to obtain a compilation initially, then progress to reviews or audits later on as the organization grows or financing needs increase.
If you are considering obtaining CPA-prepared financial statements for the first time, we understand the different service levels can be confusing. We would be happy to discuss your options and help review any specific requirements you have to ensure the service level selected meets your needs.