Compilation of financial statements is a service where the role of the CPA is more apparent to outside parties, and as such, the requirements for performing this service are more explicit. For example, if the CPA is not independent from ownership, management and other circumstances in their relationship to you and your business, she is required to disclose the impairment to her independence in her compilation report.  The compilation report is the first page before the actual financial statements and is written by the CPA on her firm's letterhead.

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The CPA is also required to read the financial statements in light of the financial reporting framework being used and consider whether the financial statements appear appropriate in form and are free from obvious material misstatements.

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However, the CPA does not obtain any assurance for a compilation because she is not required to verify the accuracy or completeness of the information provided or otherwise gather evidence for the purposes of expressing an audit opinion or a review conclusion.

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The compilation report states that the CPA did not audit or review the financial statements and accordingly does not express an opinion, a conclusion or provide any assurance on them.

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A compilation is typically appropriate when initial or lower amounts of financing or credit are sought or there is significant collateral in place.  Though no assurance is provided, outside parties may appreciate your association with a CPA, which is readily apparent in the formal compilation report.