Compilation
Does this sound familiar? The bank or an insurance company requests your annual report, which must be accompanied by a compilation statement from the accountant. We support these activities and can issue an annual report with a compilation report from the auditor. You fulfill your obligation and can do what you are good at: doing business.
Although a compilation report from the auditor for a sole proprietorship or general partnership is not required by law, in the past they were nevertheless drawn up annually to gain insight into the results. Today, we offer you as an entrepreneur a management dashboard that provides you with insight into the results of your company every period.
What exactly is a compilation report (samenstelverklaring)?
A compilation report is a statement that can be issued by an auditor. This statement contains an overview of historical financial information. This overview is often an annual report, but it can also be another overview. For a statement other than an annual report, you can think of the insured interest or a statement of income and expenditure, such as a subsidy statement.
The boards of companies, foundations, and similar organizations are responsible for the correctness and completeness of the information on which the statement is based. The accountant or auditor compiles this and reports on it utilizing his compilation report.
The nature of the engagement implies that, unlike the audit engagement and the review engagement, the compilation report does not assure the fairness of the financial statement. However, the added value of an auditor’s report is that the auditor is bound by his code of conduct in the performance of his engagement and he must perform the compilation activities by the standard. For example, he will make sure that:
- he has sufficient knowledge of the company of which he is compiling the overview;
- the statement is consistent with the applicable financial reporting framework;
- if the underlying data is incorrect or incomplete, he performs additional (audit) activities;
- he goes through the statement as to whether it is adequately designed and appears to be free from material misstatement;
- if he encounters signs of fraud or illegal acts, he performs additional (audit) activities by the same standard that also applies to audit and review engagements.
A client may not disclose the compilation statement that the auditor has provided to him unless the auditor has given explicit permission to do so.
Can we be of service to you in the area of compilation?
Wim Tebarts AA
Accountant