AR-C 120 Compilation of Pro Forma Financial Information

Original Pronouncements

Sources Statement on Standards for Accounting and Review Services (SSARSs) 22.


AR-C 120 is applicable when an accountant is engaged to compile or issue a compilation report on pro forma financial information.

Objectives of AR-C Section 120

It is important to note that the requirements in AR-C 60 apply to all SSARS engagements, including compilation engagements. Readers should apply the requirements in the chapter on Section 60 to compilation engagements in addition to the guidance in this chapter.

The objective of the accountant in a compilation of pro forma financial information is to apply accounting and financial reporting expertise to assist management in the presentation of pro forma financial information and report in accordance with this section without undertaking to obtain or provide any assurance on the pro forma financial information. (AR-C 120.03)

Entities issue pro forma information to show what the significant effects on historical financial information might have been had a consummated or proposed transaction or event occurred at an earlier date—for example, a business combination or the disposal of a portion of the business.


General Guidance


For a pro forma engagement, accountants must determine whether they are independent of the entity. (AR-C 120.06)

Acceptance and Continuance of Client Relationships

Accountants must comply ...

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