What a compilation provides
In a compilation, we assist management in presenting the association's financial information as financial statements. The statements are presented from the association's own records, in the format generally accepted accounting principles call for. Compilations are performed under the AICPA's Statements on Standards for Accounting and Review Services, in the section titled Compilation Engagements (AR-C 80).
A compilation provides no assurance. We do not test the records, confirm balances, or perform analytical procedures to obtain assurance. We read the statements to consider whether they appear appropriate in form and free from obvious material errors, but we do not express an opinion or a conclusion on them.
Audit
Reasonable assurance
Tests records against outside evidence, such as bank confirmations, and issues an opinion.
Review
Limited assurance
Inquiry and analytical procedures. No opinion is expressed.
Compilation
No assurance
Statements presented from the association's records, without testing.
For a fuller comparison, see audit vs. review vs. compilation.
When an association uses a compilation
- Florida's revenue tier. Condominiums and HOAs with total annual revenues of at least $150,000 but less than $300,000 must prepare, at a minimum, compiled financial statements.
- An owner vote for a lower level. Owners can vote to use a lower level of report than the statute requires, such as compiled statements in place of a required review or audit, but not for consecutive fiscal years. The vote requirements differ between condominiums and HOAs. See changing the level of the report.
- A higher level than the minimum. An association below $150,000 may choose compiled statements in place of the minimum report.
What the compilation involves
Each compilation is shaped by the association's records and how they are kept. Typical steps include:
- Understanding the association's fund structure, its accounting practices, and the reporting framework.
- Using the general ledger, trial balance, and supporting schedules provided by management.
- Presenting operating and reserve funds and drafting the notes from information management provides.
- Reading the statements for appropriate form and obvious material errors, and discussing anything that appears incorrect or incomplete with management.
A compilation does not include confirming balances, testing transactions, inquiry or analytical procedures to obtain assurance, or evaluating internal control.
What the board receives
- The accountant's compilation report, which states that we do not express an opinion, a conclusion, or any assurance on the statements.
- A balance sheet, a statement of revenues and expenses and changes in fund balances, a statement of cash flows, and notes. Operating and reserve funds are presented separately.
- For condominiums, the reserve disclosures required by Rule 61B-22.006, F.A.C.
The association delivers the report to owners. For deadlines and posting rules, see Florida reporting deadlines.
Records typically needed
Requests vary with each association. Most compilations draw on the following: