Some people may get confused with the Financial Report Compilation. This article will share some important things related to the services provided by Professional Accountants and Public Accountant.
Financial Report Compilation is a service provided by an accountant. It is limited on the Financial Statements presentation along with the financial statement or financial report notes in accordance with the applied Accounting Standards, started with the engagement letter between the accountant and management or the company owner. The difference from general audit is, the Financial Report Compilation does not provide an OPINION or other assurance forms towards the presentation of financial statements or financial report fairness. Since the assurance is not stated, then the applied financial statement compilation is also limited.
Some important points need to be underlined that the Accountant’s Compilation Report is not an Independent Auditor’s Report. To avoid misinterpretation, the mark “UNAUDITED”/in accordance to the determined regulations by the organization of professional accountant.
Financial Report Compilation is basically made based on the existing bookkeeping prepared by the management, thus the validity of financial report is charged to the management. The accountant undertakes some judgments, such as regarding to the generally accepted accounting principle, consultations with related management, accounting sections although the reports are generated by accounting systems or applications, valuation of bookkeeping processes and review the required adjust on client’s bookkeeping due to miscalculation, absence of relevant disclosure, or non compliance to relevant accounting principle. The accountant should be able to create sufficient documentation to present a clear understanding regarding to his completed works. Besides, the accountant provides the compilation service should have sufficient experience and knowledge of the clients to compile the financial statements.
If the compiled financial report or statement is materially misstated, then the accountants should obtain additional information to confirm or deny this impression. If he is unable to obtain the additional information, the accountant should withdraw it.
