What it is
A compilation is a service through which an outside accountant converts an organization’s data into financial statements and disclosures, in accordance with the IFRS or other recognized financial reporting framework (GAAP).
A compilation does not provide any kind of assurance; it is merely a presentation of financial statements. Therefore, the person involved in a compilation does not need to follow any analytical or review procedures, nor have an understanding of internal controls.
How it affects your business
Any organization’s accounts need to be translated to financial statements. The compilation of accounts puts together and classifies all accounts into groups, from the lowest to the highest level. Some organizations prefer to have their financial statements prepared by a third party, and at a lower cost than a review or audit, and this is where compilation comes into play.
Compilations do not require examinations regarding an organization’s management or its analytical procedures. They merely state information that is considered a representation of management.
Furthermore, compilations do not present any expression of opinion or assurance on financial statements. Therefore, it only suits specific circumstances, depending on your organization’s requirements as well as its budget.
For instance, banks often require compilations from an independent CPA as part of their lending covenants.
We at XB4 rely on our knowledge and experience of accounting principles and a general understanding of your business and the field in which it operates to perform a compilation of your financial statements.
XB4’s team of professionals provides a comprehensive range of services which come under the umbrella of compilation. These services are:
Collecting an organization’s records and accounts
– Compilation of financial statements:
The result of a write-up, and is the gathering of all financial statements by an outside accountant
– Compilation report:
Which states that:
- Financial statements are the representation of your organization’s management
- The financial statements have not been reviewed or audited and that the person involved in a compilation offers no opinion or assurances on them