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.
The Washington Report from Review of Financial Statements and Compilation by an Accounting Firm is a comprehensive document that provides an analysis and assessment of a company's financial statements. This report is generated by a professional accounting firm based in Washington and serves as a tool for stakeholders, such as investors, creditors, and management, to evaluate the financial health and performance of the company. There are two main types of Washington Reports from Review of Financial Statements and Compilation by Accounting Firm: the Review Report and the Compilation Report. 1. Review Report: The Review Report is a type of Washington Report that involves the accounting firm performing analytical procedures, inquiries, and other review procedures to obtain limited assurance on the accuracy and reliability of the financial statements. This report is typically issued when the accounting firm is engaged to review the financial statements of a company but does not express an opinion on their fairness or adherence to accounting principles. Keywords: Washington Report, Review of Financial Statements, Accounting Firm, Limited Assurance, Accuracy, Reliability, Analytical Procedures, Inquiries, Financial Health, Performance, Stakeholders, Investors, Creditors, Management. 2. Compilation Report: The Compilation Report is another type of Washington Report that presents financial statements that are the representation of management without any assurance provided by the accounting firm. In this case, the accounting firm assists the company in presenting its financial information in the form of financial statements but does not perform any audit or review procedures. The Compilation Report is often used by small businesses or for internal purposes where assurance is not required. Keywords: Washington Report, Review of Financial Statements, Accounting Firm, Compilation Report, Representation of Management, Financial Statements, Assurance, Small Businesses, Internal Purposes, Financial Information. Overall, the Washington Report from Review of Financial Statements and Compilation by an Accounting Firm plays a critical role in providing valuable insights into a company's financial performance and position. It helps stakeholders make informed decisions and provides transparency and credibility to the financial information presented to them.
