Tax Accounting Standards for Small Business. (Special Section: Exposure Draft)
Prepared by the Accounting Standards Committee 2002-2003
James H. Nolen, Chair
Lillian R. Lea, Vice Chair
Donald L. Cordano
Richard N. Davis
Alfred C. Giovetti
Christine C. Giovetti
Norma Nick Taylor
Robert M. Jennings, Technical Editor
Tax Accounting Standards for Small Business (TASSB)
Tax Accounting Standards for Small Business (TASSB) are designed to provide national, uniform standards for accountants in public practice, for the preparation of financial statements presented in accordance with the principles of accounting used in the preparation of Federal income tax returns. These principles have been established on the basis of Title 26, United States Code: the Internal Revenue Code.
There are three standards: reporting, performance and disclosure.
These standards are applicable to all businesses.
These standards apply only to compiled financial statements.
These standards are designed for all accountants--licensed and unlicensed. They follow the spirit and intent of the National Society of Accountants' Rules of Professional Conduct, Technical Standards, Rule Number 6, Interpretation Number 6.
Because the practice of accountancy is regulated by the individual states, local regulations may affect the use of the terminology and rules presented in these standards.
TASSB 1. Standards for presentation and reporting on financial statements prepared under Tax Accounting Standards far Small Business.
01. This Standard sets forth the presentation and reporting requirements when an accountant prepares financial statements for submission to clients or third parties.
A. The accountant shall not submit statements to a client or third party unless he or she complies with the provisions of this Statement.
B. For the purposes of these standards, the terms "compilation," "preparation," "compiled" and "prepared" are interchangeable.
C. An accountant shall not consent to the use of his or her name in a document or written communication containing unaudited financial statements unless the accountant has compiled the financial statements and a transmittal report accompanies them, or the financial statements are accompanied by a statement that the accountant has not compiled the financial statements and assumes no responsibility for them. If an accountant becomes aware that his or her name has been used improperly in any client-prepared document containing unaudited financial statements, the accountant shall advise the client that such use of the accountant's name is inappropriate and shall consider what other actions may be necessary, including consultation with legal counsel.
A. Certain terms are defined for the purposes of this statement, as follows:
Accountant. The term "accountant" refers to both a licensed and unlicensed individual, as well as other preparers of financial statements.
Submission of Financial Statements. The submission of financial statements means presenting to a client or third parties financial statements that the accountant has prepared either manually or through the use of computer software.
Third Party. Third parties are all parties, except for members of management, who are knowledgeable about the nature of the procedures applied and the basis of accounting and assumptions used to prepare the financial statements.
Financial Statement. A financial statement is a presentation of financial data, including accompanying footnotes, derived from accounting records and intended to communicate an entity's economic resources and obligations at a point in time, or the changes therein for a period of time, in accordance with Tax Accounting Standards for Small Business (TASSB). Financial statement forecasts, projections and similar presentations, and financial presentations included as integral parts of tax returns, are not financial statements for the purposes of this Standard. …