Tuesday, November 20, 2012

Compilations redefined

Proposed changes in compilation and review standards and accompanying proposed changes in AICPA ethics rules will more effectively define the CPA’s responsibilities regarding client financial statements.

In a set of proposed Statements on Standards for Accounting and Review Services (SSARS) issued June 29, the compilation, previously presumed to incorporate the preparation of financial statements, is redefined as an attestation and reporting engagement.

Per the proposed SSARS, the objectives in a compilation engagement are to:
  • Read the financial statements and consider whether the financial statements are free from obvious material misstatements and whether they appear to be appropriate in form, without undertaking to obtain or provide any assurance that there are no material modifications necessary for the statements to be in conformity with the applicable financial reporting framework.

  • Report in accordance with the requirements of the proposed SSARS.
Compilation standards would only apply when the accountant is engaged to perform a compilation service.

To read the full article click here 

Source: Laura A. Hay, CPA, CAE www.ohioscpa.com 

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