What is a Compilation?
A compilation is an annual compiling of your financial information. We take your information, compile it into financial statements for your company’s internal use to give you an idea of how your company is doing.
In rare cases these can be used for banks and other third parties, but are often an incorrect use as they provide no assurance. Compilations are only required to ensure that there are not any mathematical errors in the financials. Please note that all compilations are different in their size, capacity and fees.
Please contact us for a discussion of the cost of your particular circumstances, but most compilations are ~$2000+ including a tax return and minimal advisory services.
Why Bother with a Compilation?
As noted above some financial institutions will ask for compilations to be completed in line with Accounting Standards for Private Enterprises. This in itself is a problem, a report for a compilation cannot state it conforms with ASPE because a compilation does not have any assurance associated with it. Basically it is asking your mechanic to give you an inspection report with an oil change. If they require the report on the financials to state it conforms with specific accounting framework they need a Review done.
There are other reasons to have a compilation completed without any third party pressures. This allows you to see your company’s information in a simple format and get a much better overall understanding of the places your company can improve. Additionally, many CPAs will not perform a corporate tax return without a compilation, including Frosty Squirrel.
What is Included with a Compilation?
When Frosty Squirrel performs a compilation we ensure that all the financial statements are balanced and appropriate for your company or organization.
In addition to these financials we also will file your corporate tax return (T2) and if requested we can provide advice on the best ways to improve your operations or areas of concern.
Overall the compilation is not required to have significant work completed on it, however we do look for any obvious errors to be corrected, this is mainly done to ensure your T2 is not erroneous when it is filed.
So and So does it for Less
A compilation, unlike and audit or review, can be done by anyone. There is no requirement for this person to have ever studied or have any knowledge of accounting to produce a compilation report.
This is a concern in the industry as most accountants have had potential clients come in asking for help because the $300 compilation they got resulted in $500 in penalties and interest from the government for errors most CPAs would be able to see and fix in the filings.
With most things in life, you get what you pay for.
Frosty Squirrel encourages clients to bring pricing discrepancies to their attention, but unless the other firm is a CPA it is comparing apples to shiny rocks.