# Compilation engagement letter under AR-C 80 [Home](/) / [Engagement letter templates](/templates/engagement-letters) / Compilation By [Arthur Teboul](/authors/arthur-teboul), Founder, DokuTrak. Published 2026-10-29, updated 2026-10-29. > **In brief:** A compilation engagement letter is the signed agreement for an engagement in which a CPA presents management’s financial information as financial statements without giving any assurance on them. The SSARS require it in writing, signed by the accountant and by management or those charged with governance. ## The template: Compilation engagement letter **Not advice.** This page is general information, not tax, legal or HR advice. Rules change: check the cited source and ask your own professional before you rely on it. Last reviewed October 25, 2026. Fill in every [placeholder]. Keep the omitted-disclosures clause only if management chooses it, and the independence clause only if your firm is not independent. Attach the records schedule and have counsel review the template once. ```text [Firm name] [Firm address] [Date] [Owner or CFO name] [Company legal name] [Company address] Re: Compilation of financial statements for [period] Dear [Owner or CFO name], What we will compile You have asked us to compile the [balance sheet as of (date) and the related statements of income, retained earnings and cash flows for the (period) then ended] of [Company legal name], prepared in accordance with [the income tax basis / accounting principles generally accepted in the United States of America], and to issue a compilation report on them. Objective Our objective is to apply accounting and financial reporting expertise to assist you in presenting financial information in the form of financial statements, without undertaking to obtain or provide any assurance that no material modifications are needed for them to follow [framework]. Our responsibilities We will conduct the compilation under the Statements on Standards for Accounting and Review Services issued by the AICPA. We will read the statements for obvious material errors and in light of the framework. If we become aware that the records or statements are incomplete or contain errors, we will ask you for corrected information. Limitations A compilation does not include inquiries, analytical procedures or the other work of a review, nor the testing of an audit. We will express no opinion, conclusion or other form of assurance. A compilation cannot be relied on to disclose errors, fraud or illegal acts, although we will tell you of any that come to our attention, unless they are clearly inconsequential. Your responsibilities You are responsible for: (a) preparing and fairly presenting the financial statements in accordance with [framework], including all informative disclosures appropriate for that framework [unless you elect to omit them as described below]; (b) selecting the financial reporting framework; (c) designing, implementing and maintaining internal control over the preparation and fair presentation of the statements; (d) preventing and detecting fraud; (e) making sure the company complies with the laws and regulations that apply to it; (f) the accuracy and completeness of the records, documents and explanations you give us; (g) giving us access to the people and information we need; and (h) including our compilation report in any document that contains the statements and says we compiled them. Records schedule You will send the items on Schedule 1 by [date], including the trial balance, monthly bank and credit card statements with reconciliations, receivable and payable listings, loan and mortgage statements, fixed asset invoices and payroll summaries. We will deliver the statements [number] business days after the last item arrives. Records that need cleanup before we can compile them are billed at [rate]. Omitted disclosures (optional) You have elected to omit substantially all the disclosures [and the statement of cash flows] required by [framework]. Our compilation report will state this. If the omitted disclosures were included, they might influence a reader’s conclusions about the company’s financial position. Independence (optional) Because we [maintain your books / have a financial interest in the company], we are not independent with respect to [Company legal name]. Our compilation report will include a final paragraph stating that we are not independent. Bookkeeping and tax services (optional) We will also [record monthly transactions / prepare the federal and state income tax returns]. You designate [name], who has suitable skill and knowledge, to oversee these services, evaluate their results and accept responsibility for them. Our compilation report We expect to issue a compilation report stating that we did not audit or review the statements and do not express an opinion, conclusion or any assurance on them. Our report may differ from this form if circumstances require, and we may withdraw if we cannot complete the compilation. Use by lenders and others You may give the compiled statements to [lender, surety or landlord name]. Any copy that refers to our firm must include our compilation report. Fees Our fee is [amount] for each [monthly / quarterly / annual] compilation, invoiced on delivery and due within [number] days. Records retention and disputes Our working papers are the property of [Firm name] and will be kept for [retention period]; your original records will be returned to you. Any dispute about our services will first go to non-binding mediation in [city, state]. This letter is governed by the laws of [state]. Agreement Please sign below to show that you agree with these terms. They will continue for later periods until either of us changes them in writing. Sincerely, [Firm name] [Accountant name], CPA Signature: ____________________ Date: __________ Agreed for [Company legal name]: [Owner or CFO name], [Title] Signature: ______________ Date: ________ ``` Download: [Word](https://dokutrak.com/downloads/pseo-v2/f2-engagement-letters/compilation.docx) · [PDF](https://dokutrak.com/downloads/pseo-v2/f2-engagement-letters/compilation.pdf) ## Compilation, preparation or review: pick the right letter Clients often ask for “compiled statements” when they mean something else. A **compilation** is an engagement in which the accountant applies accounting expertise to help management present financial statements and issues a report, without obtaining or giving assurance. The table shows how it sits between the other two SSARS services ([AICPA SSARSs, AR-C 60, 70, 80 and 90](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)). Lenders, sureties and landlords often name the level they want in the loan or lease terms. Read that clause before you draft the letter, and match the service to it. A bank covenant that asks for reviewed statements is not met by a compilation, however clean the numbers are. A **compilation report** is the short report the accountant attaches to compiled statements. It says what management is responsible for, that the accountant compiled the statements under SSARS, and that no assurance is given. It is what separates a compilation from a preparation engagement, where no report is issued at all. | | Preparation | Compilation | Review | | --- | --- | --- | --- | | AR-C standard ([AICPA SSARSs, AR-C 60, 70, 80 and 90](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)) | Section 70 | Section 80 | Section 90 | | Assurance ([AICPA SSARSs, AR-C 60, 70, 80 and 90](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)) | None | None | Limited | | Accountant’s report ([AICPA SSARSs, AR-C 60, 70, 80 and 90](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)) | None; each page says no assurance is provided | Compilation report | Review report | | Independence ([AICPA SSARSs, AR-C 60, 70, 80 and 90](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)) | Not determined | Not required; lack of it is disclosed in the report | Required | | Signed letter ([AICPA SSARSs, AR-C 60, 70, 80 and 90](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)) | Required | Required | Required | ## The terms AR-C 80 lists, in order AR-C 80 asks for a short, specific list of terms in the engagement letter ([AICPA SSARSs, AR-C 60, 70, 80 and 90](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)). Write them in this order and the letter reads like the illustrative one in the standard. 1. The objectives of the engagement: to help management present financial information as statements, with no assurance. 2. Management’s responsibilities, from AR-C 60 and AR-C 80: preparing and fairly presenting the statements with their disclosures, the framework, internal control, fraud, compliance with laws, complete records and access to people. Management also agrees to include your report in any document that says you compiled the statements ([AICPA SSARSs, AR-C 60, 70, 80 and 90](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)). 3. The accountant’s responsibilities: perform the compilation under SSARS and read the statements for obvious material errors. 4. The limitations: no audit or review procedures, no opinion or conclusion, and no promise to find fraud or errors. 5. The applicable financial reporting framework, by name. 6. The expected form and content of the compilation report, and a warning that it may differ. ## Two options to settle before you send it The first option is disclosures. **Omitted disclosures** are the notes the framework would require but that management chooses to leave out. Management may choose to omit substantially all the disclosures the framework requires, which keeps the statements short for a lender who only wants the numbers. The letter should record that choice, and the compilation report will say the disclosures are omitted. The second option is independence. A compilation does not require it, but if the accountant is not independent, AR-C 80 requires a final paragraph in the report that says so ([AICPA SSARSs, AR-C 60, 70, 80 and 90](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)). Reasons are optional; if you give any, you must give all of them ([AICPA SSARSs, AR-C 60, 70, 80 and 90](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)). A common cause is bookkeeping done by the same firm. In that case the AICPA code also wants a named client overseer for the bookkeeping, agreed in writing ([AICPA Code of Professional Conduct, ET 1.295](https://pub.aicpa.org/codeofconduct/ethicsresources/et-cod.pdf)). ## Framework and records: what the client sends A small-business compilation can use the tax basis rather than GAAP. The **income tax basis** is a special purpose framework: the statements follow the method the company uses on its tax return, such as the cash method or an accrual method. If the statements follow the income tax basis, the framework follows the client’s tax accounting method. Under the cash method, income is generally reported in the year it is received and expenses in the year they are paid ([IRS Publication 538, Accounting Periods and Methods](https://www.irs.gov/publications/p538)). Name the method in the letter, so the reader of the statements knows which one applies. A compilation is only as good as the records behind it. List them in a schedule with a date per item, such as bank statements, loan statements and the receivable list. Say that the compilation report date moves when records arrive late, and that cleanup work on messy books is billed on top of the compilation fee. Monthly or quarterly compilations need the same list on a cycle. Write the cycle into the letter: records by the tenth business day after month end, statements a set number of days later. That keeps the letter useful after the first period. - Trial balance or the closed bookkeeping file for the period. - Bank and credit card statements, with reconciliations, for each month of the period. - Customer receivable and vendor payable listings at period end. - Fixed asset additions and disposals, with invoices, and the depreciation schedule. - Loan and mortgage statements showing the balance at period end. - Payroll summaries that tie to the quarterly returns. ## Questions people ask ### What must a compilation engagement letter include? The objectives, management’s responsibilities, the accountant’s responsibilities, the limitations, the framework, and the expected form of the compilation report with a warning it may differ ([AICPA SSARSs, AR-C 60, 70, 80 and 90](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)). Both sides sign it. ### Does the accountant have to be independent for a compilation? No. The accountant may compile statements without being independent, but the compilation report must then say so in a final paragraph ([AICPA SSARSs, AR-C 60, 70, 80 and 90](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)). ### Can a compilation omit the notes to the financial statements? Yes, if management chooses to omit substantially all disclosures. The engagement letter records the choice, and the compilation report states that the disclosures are omitted ([AICPA SSARSs, AR-C 60, 70, 80 and 90](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)). ### Who signs a compilation engagement letter? The accountant or the accountant’s firm, and management or those charged with governance, as appropriate ([AICPA SSARSs, AR-C 60, 70, 80 and 90](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)). For a small company that is usually the owner or the CFO. ## Sources - [AICPA SSARSs, AR-C 60, 70, 80 and 90](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective): AR-C 80 lists the terms a compilation engagement letter must include, requires signatures from both sides, and requires a lack of independence to be disclosed in the report. - [AICPA Code of Professional Conduct, ET 1.295](https://pub.aicpa.org/codeofconduct/ethicsresources/et-cod.pdf): Nonattest services for an attest client need a client-designated overseer and a written understanding before the work starts. - [IRS Publication 538, Accounting Periods and Methods](https://www.irs.gov/publications/p538): Under the cash method, income is generally reported when received and expenses deducted when paid; under an accrual method, when earned and incurred. ## More on this topic - [AICPA engagement letter templates](/templates/engagement-letters/aicpa-templates) - [Engagement letter template (general)](/blog/engagement-letter-template) - [Engagement letter templates by service](/templates/engagement-letters) ## About the author Arthur Teboul (Founder, DokuTrak) is building DokuTrak after watching professionals lose hours chasing clients for documents over email. [Arthur Teboul](/authors/arthur-teboul). How this page was made (methodology): it is built from the primary sources listed under Sources, and every rule and figure on it links to the source it comes from. Last updated October 25, 2026. Spotted an error or a rule that changed? [Contact us](/contact). ## Ask once. DokuTrak does the chasing. - Your client uploads from one link, with no account and no password. - Reminders go out on a schedule, by default 2, 5, 10 and 14 days after the request, until the file arrives. - You accept every file or mark it for re-upload, and your client gets the note by email. The AI never accepts a file. 14-day free trial, no card. Add one only to keep going. [Request these documents with DokuTrak](https://app.dokutrak.com/sign-up?docs=bank-statement%2Ccredit-card-statement%2Cinvoice%2Cmortgage-statement)