What is meant by compilation of financial statements?

Companies, however small, hire accountants to take a stock of their financial health. The financial reports prepared by these professionals are useful in assessing present situation of the company and in taking decisions about the future direction of the company. During compilation of financial statements, provided data is arranged in the predetermined form. While going through it, accountants check its form, whether it is free of material errors and issue a certificate saying so. The certificate does not say anything about the reliability of the data. Alternately, an accountant can also be engaged to conduct a review or the audit of a business. Here, accountants check for the reliability of the data provided by the company and submits a report. Such a report gives true state of the financial health of the business. Government regulators, investors, creditors, and management use this report to make decisions.