Standard Compilation Report - The auditor takes no responsibility for the fairness of the financial statements, but should be alert to obvious misstatements. Omission of Disclosures for compilations - Compiled financial statements may omit substantially all of the required disclosures if the accountant believes that such omission is not made with the intention of misleading the users and the omission is noted in the compilation report. If the public accounting firm is not independent with respect to the client, a separate paragraph should be added to the compilation report stating that fact. Procedures Accountant must have more knowledge and evidence than a compilation, but significantly less than an audit. Accountant should obtain a general understanding of the entity's organization, operating characteristics, types of transactions, liabilities and assets, compensation methods, types of products and services, operating locations and related parties.
Accountant is required to make inquiries or perform analytical procedures only.
However, if the accountant believes information provided by the client may be incorrect, imcomplete, or otherwise unsatisfactory, additional or revised information should be obtained. Distinguishing among Audits, Reviews and Compilations - See Exhibit 21.17.