REVIEWS AND COMPILATIONS

Have your independent accountants informed you of the critical differences between reviews and compilations?

Reviews

A ‘review’ is somewhat more rigorous than a compilation but less detailed than an audit. A review report states that the CPA has reviewed the financial statements in accordance with Statements on Standards and Review Services (‘SSARS’). It also states that a review consists principally of inquiries of company personnel and analytical procedures; that a review is substantially less in scope than an audit; and that the CPA is not aware of any material modifications that should be made in order to be in conformity with GAAP.

 

For a review:

  • The CPA must be independent
  • The report must include notes and cash flows

 

Compilations

A compilation report states that the CPA has compiled the financial statements in accordance with SSARS; that a compilation is limited to presenting, in the form of financial statements, information that is the representation of management; and that the CPA does not express an opinion or any other form of assurance on them.

 

A compilation report:

  • Does not have to include footnotes or cash flows, but that limitation must be mentioned in the report
  • The CPA does not have to be independent, but that limitation must be mentioned in the report
  • The CPA’s responsibility is to see that the financials are free from obvious material misstatement
This site and the collected data is governed as per our Privacy Policy and adheres to GDPR and CCPA guidelines