Financial Statement Compilation
- NPL provides financial statement compilations as a service to assist the management of a business in presenting its financial statements.
- A financial statement compilation is the least expensive of the various forms of auditing services (the other two being a review and an audit), and so is preferred by those cost-sensitive entities whose financial statement users are comfortable with this form of engagement. Because there is no assurance that compiled financial statements fairly present the results and financial position of a business, a compilation is generally not preferred by lenders and creditors.
- A compilation engagement may include either a complete set of financial statements or an individual statement.
- Under a compilation, management takes responsibility for the preparation and presentation of the financial statements. NPL will ensure that it has sufficient industry-level experience and knowledge of the client to compile the financial statements.
- NPL provides sufficient documentation and discussion of a clear understanding of the work that has been completed. This documentation includes the engagement letter and significant issues, if any,
- When compilations are completed, NPL provides a written report that accompanies the compiled financial statements. This report states that NPL has not audited or reviewed the financial statements, and therefore does not express an opinion or provide any assurance about whether the financial statements are in accordance with GAAP or a special purpose.
