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Compiled Financial Statements

Compiled financial statements involves the taking financial information provided by the company and compiling it into financial statement format. This is done by an outside CPA and the statements are solely based on the information provided by the company. The compilation report states that the financial statements are the representation of management, that the statements have not been audited or reviewed, and that no opinion or other form of assurance has been expressed. To say it another way, although compiled financial statements are independently prepared, they don't offer any type of assurance to the accuracy of the statements or their conformity to generally accepted accounting principals (GAAP). You will see these most fresquently in smaller companies because they are the least expensive and easiest option.

These services are usually best when an outside CPA is needed to help with the financial reporting. (Quickbooks reports are not financial reporting). If the compiliation rerport is on GAAP financial statements, then the services get more involved as the required footnotes are needed. If footnotes are needed then a compilation report can be issued "with financial disclosures omitted". This is then just the basic financial statements.

Beginning in 2016 a new financial statement preparation service can be provided by the CPA. This service, while very similar to a compilation, is strickly preparing the financial statements and not issuing any report or any kind accurance on the financial statements.