How do you write a compilation letter?
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 accordance with SSARS.
What is a compilation letter?
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.
What is a full disclosure compilation?
The compilation report may be a full disclosure report with complete footnote explanations of certain amounts and policies contained in the financial statements. Or, these otherwise required disclosures may be omitted. Omission of this information is not permissible under the other levels of service.
Does a compilation need a representation letter?
The compilation standards do not require practitioners to obtain a management representation letter, but this does not mean that it’s not a prudent thing to do.
What is the difference between preparation and compilation?
In a preparation engagement, the accountant is literally preparing the financial statements based on information management provides (e.g. trial balances). In a compilation engagement, management prepares the financial statements, and the accountant will read and help finalize the financial statements.
What is the purpose of the compilation?
A compilation means to transform a program written in a high-level programming language from source code into object code. Programmers write programs in a form called source code. Source code must go through several steps before it becomes an executable program.
How much does a compilation report cost?
A compilation does not include performing inquiries of management or performing any analytical or other procedures ordinarily performed in a Review or Audit. Compiled financial statements generally range in costs from $800 – $3,500 based on the size and complexity of your company and can take 1-2 weeks to complete.
Why do I need a compilation report?
You may be considering a business expansion or acquiring a new business. Such action usually requires the preparation of a forecast or projection. A compilation report would be issued with the forecast or projection since the financial information would be based on the representations of management.
Is a representation letter required for a compilation?
Are engagement letters required for compilations?
The requirement that the accountant modify the accountant’s compilation report whenever the accountant’s independence is impaired is retained. The accountant is required to obtain an engagement letter signed by both the accountant and the client’s management.
Can a non CPA issue a compilation report?
Only a CPA can prepare an audited financial statement and a reviewed financial statement. However, both CPAs and non-certified accountants, including bookkeepers, can prepare compiled financial statements.