Get Miscellaneous Technical Statements - M14 Revised Compiling

A compilation refers to a company's financial statements that have been prepared or compiled by an outside accountant. A compilation is usually part of an accounting firm's write-up service.

The three main documentation that an accountant is required to prepare during compilation engagement include: Engagement letter. ... Financial statements. ... Compilation report.

An accountant can issue a compilation report even though independence is lacking. When independence is impaired, the Statement on Standards for Accounting and Review Services requires that the CPA modify the compilation report.

The compilation report should: Include a statement that management (owners) is (are) responsible for the financial statements. Identify the financial statements. Identify the entity. Specify the date or period covered. Include a statement that the compilation was performed in ance with SSARS.

A compilation is literally a compilation of financial records into a format required by accounting standards. When this work is performed by an auditor it is referred to as a “compilation” and accounting standards require the auditor to assess whether the records are free from obvious errors.

Does a compilation require a management representation letter? Yes, a compilation engagement requires a Management Representation Letter. The letter is required to assure the accountant that the financial statements and disclosures are accurate and complete to the best of management's knowledge.

When performing compilation, the accountant should prepare adequate documentation that provides information on the work that has been carried out. Some of the documentation includes the engagement letter, financial statements, and communication with management regarding significant issues identified during the audit.

There are three forms of a compilation report, the engagement letter that is accepted by a CPA, the financial statement presentation by the CPA, and the compilation report required by the CPA to be provided to the client. These three documents are required for compiling the financial statement of the company.