Document background
The Compilation Engagement Letter serves as a crucial document in Philippine accounting practice, establishing the professional relationship between an accounting firm and its client for compilation services. This document is required when a client needs assistance in preparing financial information without providing assurance, as distinct from audit or review engagements. The letter must comply with Philippine Standards on Related Services (PSRS) 4410, the Philippine Accountancy Act, and other relevant local regulations. It explicitly details the nature of compilation services, emphasizing that while the accountant helps prepare financial information, they do not provide any assurance on its accuracy. The Compilation Engagement Letter is particularly important for small and medium-sized enterprises, private companies, and organizations requiring professional assistance with financial statement preparation while managing expectations about the level of assurance provided.
