Wiley Practitioner's Guide to GAAS 2015: Covering all SASs, SSAEs, SSARSs, PCAOB Auditing Standards, and Interpretations

AT 401 Reporting on Pro Forma Financial Information

ORIGINAL PRONOUNCEMENT

Original Pronouncement

Statements on Standards for Attestation Engagements (SSAE) 10, Attestation Standards: Revision and Recodification.

APPLICABILITY

AT 401 applies to reports on an examination or a review of pro forma financial information. When pro forma information is provided outside the financial statements and the accountant is not engaged to report on it, the guidance in Section 550, Other Information in Documents Containing Audited Financial Statements, applies.

DEFINITION OF TERM

Pro forma financial information. Shows “what the significant effects on historical financial information might have been had a consummated or proposed transaction (or event) occurred at an earlier date.” (Emphasis added.)

OBJECTIVES OF AT SECTION 401

A high rate of mergers and acquisitions in the late 1980s increased the need for guidance on pro forma financial information. The Auditing Standards Board issued an SSAE, Reporting on Pro Forma Financial Information (the Statement), in 1988. The attestation statement applies to the accountant's involvement with all presentations of pro forma financial information, including information required by Article 11 of Securities and Exchange Commission (SEC) Regulation S-X.

The statement explains the application of the general guidance for attestation engagements to engagements to report on pro forma information. The permitted levels of service that the accountant ...