Do I need compiled financial statements?

Compiled financial statements don’t have the same degree of authority as audited financial statements.

This is because unaudited financial statements prepared by an accountant are entirely based on information provided by management. The finished report does not express an opinion or assurance on the accuracy of the information. Even so, for a small business or private company that doesn’t need to meet generally accepted accounting principles, a compilation engagement can be the most cost-effective and efficient option for a review or audit. 

Compiled financial statements are often requested by lenders and banks when businesses apply for mortgages, credit cards or loans. A new accounting standard came into effect in 2021 to ensure compilation engagements provide useful and consistent financial information for third parties, so be prepared for more engagement with your CPA in your next financial statement compilation process.