Almost every organization – whether its a privately – held business, publicly owned corporation, non-profit organization or pension fund – must prepare reports on its financial performance. These reports help owners and management make operational decisions, enable creditors to evaluate loan applications, and provide critical information for investors. These varying needs have led to the accounting profession developing standards that enable CPAs to offer a range of financial statement services.
There are three levels of assurance. A compilation is useful to small, privately held entities that need help in preparing their financial statements. Compiled financial statements are prepared based on information provided by the entity’s management.