Statement on Standards for Accounting and Review Services No. 15 - Elimination of Certain References to Statements on Auditing Standards and Incorporation of Appropriate Guidance into Statements on Standards for Accounting and Review Services

Journal of Accountancy, October 2007 | Go to article overview

Statement on Standards for Accounting and Review Services No. 15 - Elimination of Certain References to Statements on Auditing Standards and Incorporation of Appropriate Guidance into Statements on Standards for Accounting and Review Services


(Amendment to Statement on Standards for Accounting and Review Services [SSARS] No. 1, Compilation and Review of Financial Statements, AICPA, Professional Standards, vol. 2, AR sec. 100.01, 100.04, 100.14-.15, 100.18, 100.42, 100.46-100.48, 100.59, 100.79, and 100.82; amendment to SSARS No. 2, Reporting on Comparative Financial Statements, AICPA, Professional Standards, vol. 2, AR sec. 200.05; amendment to SSARS No. 3, Compilation Reports on Financial Statements Included in Certain Prescribed Forms, AICPA, Professional Standards, vol. 2, AR sec. 300.01; and amendment to SSARS No. 4, Communications Between Predecessor and Successor Accountants, AICPA, Professional Standards, vol. 2, AR section 400.09; and rescission of Interpretation No. 4, "Discovery of Information After the Date of the Accountant's Report" and Interpretation No. 12, "Reporting on a Comprehensive Basis of Accounting Other Than Generally Accepted Accounting Principles")

Amendment to AR Section 100, Compilation and Review of Financial Statements (AICPA, Professional Standards, vol. 2, AR sec. 100.01, 100.04, 100.14-.15,100.18, 100.42, 100.46-100.48, 100.59, 100.79, 100.82)

1. AR section 100, Compilation and Review of Financial Statements, as amended, sets forth the performance and communication requirements when an accountant submits unaudited financial statements of a nonpublic entity to his or her client or to third parties This amendment revises AR section 100 by eliminating certain references to auditing literature and, where deemed appropriate, incorporating guidance similar to that originally referenced.

2. New language is shown in boldface italics; deleted language is shown by strikethrough.

.01 This [begin strikethrough]Statement[end strikethrough] Section sets forth the performance and communication requirements when an accountant submits unaudited financial statements of a nonpublic entity to his or her client or third parties. The accountant should not submit unaudited financial statements of a nonpublic entity to his or her client or a third party unless, as a minimum, he or she complies with the provisions of this section applicable to a compilation engagement.

a. Compilation of financial statements. (1) If the accountant performs a compilation, a communication to management is required. The type of communication depends on the following.

1. If the accountant is engaged to report on compiled financial statements or submits financial statements to a client that are or reasonably might be expected to be used by a third party, see paragraphs .11-.[begin strikethrough]19[end strikethrough]20 for reporting requirements.

2. If the accountant submits financial statements to a client that are not reasonably expected to be used by a third party, see paragraphs .[begin strikethrough]20[end strikethrough]22-.[begin strikethrough]23[end strikethrough]25 for required communications to management.

In deciding whether the financial statements are or reasonably might be expected to be used by a third party, the accountant may rely on management's representation without further inquiry, unless information comes to his or her attention that contradicts management's representation.

In each of the above circumstances, the performance requirements in paragraphs .05 and .07-.10 apply.

b. Review of financial statements. ([begin strikethrough]2[end strikethrough]) If the accountant performs a review, see paragraphs .05 and .[begin strikethrough]24[end strikethrough]26-.[begin strikethrough]44[end strikethrough]50 for performance and reporting requirements.

DEFINITIONS

.04 Certain terms are defined for purposes of this [begin strikethrough]Statement[end strikethrough] Section as follows.

Submission of financial statements. Presenting to a client or third parties financial statements that the accountant has prepared either manually or through the use of computer software. …

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Statement on Standards for Accounting and Review Services No. 15 - Elimination of Certain References to Statements on Auditing Standards and Incorporation of Appropriate Guidance into Statements on Standards for Accounting and Review Services
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