Image courtesy of user "777546" on Pixabay.com

Image courtesy of user “777546” on Pixabay.com

In the accounting world, the term “compilation” refers to formal financial statements prepared by a public accountant.

A compilation consists of financial statements and a cover letter stating that the accountant compiled the statements under a particular basis of accounting.

As opposed to audits or reviews, a compilation report does NOT give any assurances about the financials other than that they are being presented based on a particular method of accounting (such as tax basis or GAAP).

For more tax and accounting terms, visit the Glossary page on this website.