Solutions: Financial Statement Compilations

A financial statement compilation serves to present information in a professionally acceptable form and substance in accordance with General Accepted Accounting Principles. It does not constitute an audit or review, and accordingly, it does not provide any degree of assurance. In essence, the financial information in the statements are strictly management’s representations. Management may elect to omit substantially all of the disclosures required to by Generally Accepted Accounting Principles. However, this may not be advisable because disclosures in the financial statements may influence the user's conclusions about the company's financial position, results of operations and cash flows. Explanations are important for purposes of interpreting financial statements by those who are not informed.