Module 6

Accounting and Review Services

Accounting and Review Services

  • Revised SSARS have been issued that will be tested beginning in April of 2015. The information on this slide should be reviewed if you are taking the examination at or after this date.
  • These standards allow a new form of association called financial statement preparation.
    • The accountant prepares financial statements for a client using the records, documents, explanations, and other information provided by management.
    • Each page of the financial statements should be marked “no assurance provided.”
    • No accountant's report is required with the financial statements.
  • When a compilation is performed a compilation report is performed, a compilation report must be issued even if the financial statements are for internal use only.

Nature of Compilations

Third-party use

  • Yes? Must issue a compilation report
    • State in report not an opinion and no assurance is provided
  • No?
    • Add a point in engagement letter indicating that the financial statements are not to be used by a third party.
    • Each page of financial statements includes “Restricted for Management's Use Only.”
    • No compilation report is required.

Note: This “No” option does not exist under the revised SSARS (see this module's first slide).

Planning Compilations

  • Establish and document understanding with management in written agreement
  • Obtain management permission to talk to predecessor accountants who are required to respond
  • If unfamiliar with client business, ...

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