[joyflying]

Hi,

I have problems understanding what compilation really is. Is is just assembling JEs prepared by management to financial statements by auditors or something else? Also I have trouble understanding Becker MCQ A2-Compilation and Review #6. I am wondering why reproducing client-prepared financial statements without modification is not a compilation engagement. Anyone can help me out?

Thanks a lot!

FAR - 93 (08/24/2014 - First down!)
AUD - 91 (11/21/2014 - Second down!!)
BEC - 90 (02/26/2015 - Third down!!!)
REG - 94 (05/29/2015 - Touch down!!!!!)

Here comes my touch down!
Certified in MA (08/2015)

[rzrbkfaith]

A compilation requires an accountant to issue a report (accountant's compilation report). The compilation is intended for use by a party outside the company (usually a bank). You are required to read the financial statements to make sure there is no obvious error… which means that simply reproducing client-prepared statements would NOT be a compilation.

A compilation is assisting the client with the preparation of the financial statements. Basically you are taking client prepared financial information and producing financial statements without doing any analyticals or audit work. You are only looking for any obvious errors. Remember, you don't have to be independent, but you have to disclose if you are not. Also, you don't have to include the cash flow and/or disclosures, but you have to disclose the omission and its possible effects.

Good luck with AUD!

AUD - 99
BEC - 97
REG - 91
FAR - 1/8/16

[Anonymous]

rzbkfaith, great stuff could you answer my question in the AUD thread?

[Author]

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