In a compilation engagement, the accountant presents in the form of financial statements information that is the representation of management (owners) without undertaking to express any assurance on the statements. In other words, using management's records, the accountant creates financial statements without gathering evidence or opining about the validity of those underlying records. Because compiled financial statements provide the reader no assurance regarding the statements, they represent the lowest level of financial statement service accountants can provide to their clients. Accordingly, standards governing compilation engagements require that financial statements presented by the accountant to the client or third parties must at least be compiled.
Oklahoma Report from Review of Financial Statements and Compilation by an Accounting Firm A detailed description of Oklahoma Report from a Review of Financial Statements and Compilation by an Accounting Firm will be provided in this article. This report is an integral part of evaluating an organization's financial health and performance, uncovering any potential discrepancies, and ensuring compliance with accounting standards. It assists stakeholders, such as investors, lenders, and management, in making informed decisions based on accurate financial information. Different Types of Oklahoma Report from Review of Financial Statements and Compilation by Accounting Firm: 1. Compilation Report: A Compilation Report is a financial statement presentation prepared by an accounting firm. It conveys that the firm has taken the client's data and compiled it into a financial statement format but has not conducted any detailed examination or verification. This report is appropriate when users require a basic understanding of the organization's finances but do not need assurance on the accuracy of the information presented. 2. Review Report: A Review Report is a step-up from a compilation report as it includes limited assurance on the financial statements' accuracy. The accounting firm performs specific procedures, such as inquiries and analytical procedures, to obtain sufficient evidence. The review report outlines the findings and confirms that the financial statements are plausible, although the accountants do not express a formal opinion on their accuracy. 3. Audit Report: While an audit report is not directly linked to the Oklahoma-specific report, it is essential to mention it as a notable type of financial statement examination performed by accounting firms. An audit report goes beyond the scope of a review or compilation report. It provides the highest level of assurance as accountants conduct extensive testing, scrutinizing financial records, internal controls, and more. The audit report expresses an opinion on whether the financial statements fairly represent the organization's financial position and operating results. Key Components of Oklahoma Report from Review of Financial Statements and Compilation by Accounting Firm: 1. Introduction: The report starts with an introduction, which usually includes the name of the accounting firm, its address, and the report's date. It may also mention the specific standards followed during the review or compilation process. 2. Scope: This section outlines the scope of the accounting firm's work, indicating the dates covered, the extent of the examination or compilation, and any limitations encountered during the process. 3. Executive Summary: The report comprises an executive summary that briefly states the purpose of the report and provides a summary of the findings. It highlights any significant matters identified during the review or compilation. 4. Procedures Performed: The accounting firm describes the specific procedures performed, such as inquiries with management, analytical procedures, or testing of certain transactions. This section assures the reader that adequate work was conducted to provide a sound basis for the report. 5. Findings and Conclusion: The report concludes with the presentation of the findings and the accounting firm's opinion or conclusion. For a review report, this would typically indicate that no material modifications are necessary, whereas an audit report might express an unqualified opinion, qualified opinion, or even an adverse opinion. In summary, an Oklahoma Report from Review of Financial Statements and Compilation by an Accounting Firm provides users with a comprehensive analysis of an organization's financial health. It encompasses compilation, review, and audit reports, each offering different levels of assurance. These reports aid stakeholders in understanding the organization's financial position, ensuring transparency, and facilitating sound decision-making.
