The lowest level of analysis takes place with a compilation. This action gathers the data from the organizations books and creates financial statements. It trusts the word of management that all transactions are accurate and complete without further analysis. It may have been created by software or a bookkeeper but has not been analyzed by a CPA. These statements are generally used internally to monitor and control the operations of the business, but are rarely accepted by lenders or investors, as there is no assurance that the information is an accurate representation of the operations financial health.
Despite how simple and promising the leading online tax prep software seems, it will never replace live person-to-person tax preparation and planning, accounting and a tax pro’s hands-on wisdom. Also, most online or boxed software entails extra filing fees. Why not give this fee to a tax pro in exchange for a larger return?