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Compilations |
Compilations
Compilations are the most basic form of financial
statements that carry an accountant’s opinion letter. A full set of financial statements will
include balance sheet, statement of income, statement of cash flows and notes
to the financial statements. A compilation does not involve any audit or review of
client accounting data. No independent
verification of any financial data is performed. Instead, information provided by the client
is utilized to prepare financial statements in the proper form with necessary
footnote disclosures in accordance with Generally Accepted Accounting
Principles (GAAP). In the process of
completing a compilation, we may be required to post certain adjustments,
such as depreciation and amortization, into the client accounting records. Many banks and insurance
companies will accept compiled financial statements for small and/or
closely-held businesses. Larger
companies, or those with significant loans, accounts receivable and/or
inventory, may be required to issue financial statements with a higher degree
of authenticity, such as a review or audit.
Generally, a compilation may be sufficient to satisfy the minimum
requirements of a bank loan agreement or an insurance company performance
bond. Preparation of compiled financial statements is usually an
inexpensive proposition, unless significant effort is required to properly
formulate financial data and obtain information for financial statement
disclosures. Our fees are set at a low
and fixed affordable fee, assuming sufficient support is received from our
client in the data-gathering stage. An example of a compilation opinion: We have compiled the accompanying balance sheet of XYZ
Company as of December 31, 2010 and the related statements of income and
changes in retained earnings and cash flows for the quarters then ended, in
accordance with standards established by the American Institute of Certified
Public Accountants. A compilation is limited to presenting in the form of
financial statements information that is the representation of
management. We have not audited or
reviewed the accompanying financial statements and, accordingly, do not
express an opinion or any other form of assurance on them. |
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Copyright © 1999 - 2011 Regalia & Associates, CPAs |
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