Ever wondered how businesses keep track of their money and show it to others? One way is through something called a compilation report. To make sure everyone understands this report, accountants use a special letter to explain it. This essay will break down what an Accountant Compilation Report Letter Sample is, why it’s important, and show you some examples of different types of letters you might see.
The Core of the Compilation Report Letter
An Accountant Compilation Report Letter Sample is a formal document that accompanies a business’s financial statements. Think of it like a guide explaining what the financial statements are and what they aren’t. The accountant isn’t checking if the numbers are 100% perfect like in an audit, but rather, they’re putting together the information provided by the business into a clear and understandable format. This letter is very important because it clarifies the accountant’s role and the level of assurance they’re providing on the financial statements.
The letter usually includes a few key things. First, it states that the accountant has compiled the financial statements based on information the company gave them. Second, it clearly says that the accountant hasn’t audited or reviewed the statements, so they’re not expressing an opinion on whether the numbers are completely accurate. Finally, the letter explains that the management of the company is responsible for the financial statements themselves, not the accountant.
Here’s a quick summary of what the Accountant Compilation Report Letter usually covers:
- Compilation based on company’s information
- No audit or review performed
- Management is responsible for the financial statements
Accountant Compilation Report Letter Sample - Basic Compilation
Basic Compilation Report Letter Example
[Accountant’s Letterhead]
[Date]
[Name of Company]
[Address of Company]
Management is responsible for the accompanying financial statements of [Company Name], which comprise the balance sheet as of [Date], and the related statements of income, retained earnings, and cash flows for the year then ended, and for determining that the financial reporting framework is acceptable.
I (We) have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. I (We) did not audit or review the financial statements nor was I (we) required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, I (we) do not express an opinion, a conclusion, nor provide any assurance on these financial statements.
Sincerely,
[Accountant’s Signature]
[Accountant’s Name]
Accountant Compilation Report Letter Sample - With Omission of Substantially All Disclosures
Omission of Substantially All Disclosures Example
[Accountant’s Letterhead]
[Date]
[Name of Company]
[Address of Company]
Management is responsible for the accompanying financial statements of [Company Name], which comprise the balance sheet as of [Date], and the related statements of income, retained earnings, and cash flows for the year then ended, and for determining that the financial reporting framework is acceptable.
I (We) have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. I (We) did not audit or review the financial statements nor was I (we) required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, I (we) do not express an opinion, a conclusion, nor provide any assurance on these financial statements.
Management has elected to omit substantially all of the disclosures ordinarily included in financial statements prepared in accordance with the [specify financial reporting framework]. If the omitted disclosures were included in the financial statements, they might influence the user’s conclusions about the company’s financial position, results of operations, and cash flows. Accordingly, these financial statements are not designed for those who are not informed about such matters.
Sincerely,
[Accountant’s Signature]
[Accountant’s Name]
Accountant Compilation Report Letter Sample - With Known Departures from GAAP
Known Departures from GAAP Example
[Accountant’s Letterhead]
[Date]
[Name of Company]
[Address of Company]
Management is responsible for the accompanying financial statements of [Company Name], which comprise the balance sheet as of [Date], and the related statements of income, retained earnings, and cash flows for the year then ended, and for determining that the financial reporting framework is acceptable.
I (We) have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. I (We) did not audit or review the financial statements nor was I (we) required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, I (we) do not express an opinion, a conclusion, nor provide any assurance on these financial statements.
However, during my (our) compilation, I (we) became aware that management has not capitalized certain lease obligations as required by generally accepted accounting principles. Had these leases been capitalized, assets would have increased by $[Amount], and liabilities would have increased by $[Amount]. Net income would have been decreased by $[Amount] and retained earnings would have decreased by $[Amount].
Sincerely,
[Accountant’s Signature]
[Accountant’s Name]
Accountant Compilation Report Letter Sample - For a Non-Profit Organization
Non-Profit Organization Example
[Accountant’s Letterhead]
[Date]
[Name of Non-Profit]
[Address of Non-Profit]
Management is responsible for the accompanying financial statements of [Non-Profit Name], which comprise the statement of financial position as of [Date], and the related statements of activities, and cash flows for the year then ended, and for determining that the financial reporting framework is acceptable.
I (We) have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. I (We) did not audit or review the financial statements nor was I (we) required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, I (we) do not express an opinion, a conclusion, nor provide any assurance on these financial statements.
Sincerely,
[Accountant’s Signature]
[Accountant’s Name]
Accountant Compilation Report Letter Sample - With Emphasis of Matter Paragraph
Emphasis of Matter Paragraph Example
[Accountant’s Letterhead]
[Date]
[Name of Company]
[Address of Company]
Management is responsible for the accompanying financial statements of [Company Name], which comprise the balance sheet as of [Date], and the related statements of income, retained earnings, and cash flows for the year then ended, and for determining that the financial reporting framework is acceptable.
I (We) have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. I (We) did not audit or review the financial statements nor was I (we) required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, I (we) do not express an opinion, a conclusion, nor provide any assurance on these financial statements.
Emphasis of Matter
As discussed in Note X to the financial statements, the Company has significant transactions with related parties.
Sincerely,
[Accountant’s Signature]
[Accountant’s Name]
Accountant Compilation Report Letter Sample - For Personal Financial Statements
Personal Financial Statements Example
[Accountant’s Letterhead]
[Date]
[Name of Individual]
[Address of Individual]
Management is responsible for the accompanying statement of assets and liabilities – income tax basis of [Individual’s Name] as of [Date], and the related statement of changes in net worth – income tax basis for the year then ended, and for determining that the income tax basis of accounting is acceptable.
I (We) have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. I (We) did not audit or review the financial statements nor was I (we) required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, I (we) do not express an opinion, a conclusion, nor provide any assurance on these financial statements.
Sincerely,
[Accountant’s Signature]
[Accountant’s Name]
The Accountant Compilation Report Letter Sample is a vital part of the compilation process. It ensures that everyone involved understands the nature of the work performed by the accountant and the responsibilities of the company’s management. By understanding these reports, you can gain a clearer picture of a business’s financial standing.