Financial statements prepared by us for the business owner or third parties.
Preparing financial statements of a private entity based on information provided by the entity’s management.Through compilation services, a CPA prepares monthly, quarterly, or annual financial statements. During a compilation, the data is simply arranged into a conventional, readable financial statement form. No probing is conducted beneath the surface unless the CPA becomes aware that the data provided is in error or incomplete.However, before agreeing to perform a compilation, a CPA will take a "common sense" look at the entity to decide whether the client needs other accounting services.Here’s what a compilation entails:The CPA becomes familiar with the accounting principles and practices common to the client’s industry, and acquires a general understanding of the client’s transactions and how they are recorded.After compiling the financial statements, the CPA is obliged to read them and consider whether they are appropriate in form and free from obvious material errors. The CPA then issues a standard report that says, in effect, that the financial statements were compiled.Compilation standards permit a CPA to compile financial statements that omit footnote disclosures required by generally accepted accounting principles or another comprehensive basis of accounting (cash or income tax). This is allowable as long as the omission is clearly indicated in the report and there is no intent to mislead users. However, when footnote disclosures have been left out, the CPA adds a paragraph to the compilation report stating that management has elected to omit disclosures. This paragraph lets the user know that if the financial statements contained this information, it might affect the user’s conclusions.You may need a compilation to stay in compliance, or as a requirement for a bank loan/covenant, or for owner/board review of the company's operations.Please contact us for more information.