1. 2017 Update on Standards for Financial Statement Preparation, Compilation, and Review Engagements and tools Prepared by: Mike Glynn, CPA, CGMA AICPA (New York, NY) Presented by: James D. Miller, CPA CGMA The Business Doctor, CPA, PC
Clarity Long deck

2. DISCLAIMER
Views expressed by AICPA employees are expressed for purposes of deliberation, providing member services and other purposes exclusive of practicing public accounting. Views expressed by AICPA staff do not necessarily represent the official views of the AICPA unless otherwise noted. Official AICPA positions are determined through certain specific committee procedures, due process and deliberation.
Clarity Long deck

3. Session Objectives
Discuss the performance of financial statement preparation, compilation, and review engagements in accordance with SSARS 21.  
Discuss recently issued SSARS Nos. 22 and 23
Discuss the ARSC’s current active agenda
Slide 3

4. Preparation of Financial Statements

5. Preparation of Financial Statements
AR-C section 70 applies when the accountant is engaged to prepare f/s but not engaged to perform an audit, review, or compilation on those f/s

6. When does Section 70 apply?

7. Preparation of Financial Statements
The understanding with the client as to what the engagement entails is important!!
Requires an engagement letter signed by both the accountant and management/those charged with governance
Does not require the accountant to consider whether he or she is independent
Can be applied to f/s with or without disclosures

8. Preparation of Financial Statements
Report is not required – even if financial statements are expected to be used by a third party
Requires a legend on each page of the f/s stating that no assurance is being provided
Normally placed on the bottom of each page of the financial statements – including related notes
Ensures that users are able to readily identify that the accountant is providing no assurance with respect to the financial statements.

9. Preparation of Financial Statements
If management refuses or cannot include the legend, the accountant can:
Issue a disclaimer report,
Perform a compilation, or
Resign.

10. Preparation of Financial Statements
If the financial statements omit substantially all disclosures – disclose the omission in the financial statements
Can be disclosed in the titles:
XYZ Company
Balance Sheet
Substantially All Disclosures Required by GAAP Omitted
December 31, 20X2
Can be in the legend:
Substantially all disclosures required by GAAP omitted. No assurance is provided on these financial statements.
Can be in a selected note to the financial statements.

11. Preparation of Financial Statements
If the financial statements contain a known framework departure – disclose in the financial statements
May be on the face of the financial statements or in a note
Do not prepare financial statements if omission of disclosures or other known framework departures are done to mislead users

12. Preparation of Financial Statements
When preparing financial statements in accordance with a special purpose framework/OCBOA, the accountant is required to include a description of the financial reporting framework on the face of the financial statements or in a note to the financial statements.

13. Preparation of Financial Statements
practice-management-resource-directory
Invigorate the Focus on Quality Toolkit
Take a fresh look at the quality control processes and procedures in your practice with the resources in this toolkit.  You’ll find a checklist to help ensure the tone at the top reinforces a commitment to quality along with client acceptance and continuance tools, staff training resources and a look at trending issues in peer review. Other tools are being developed to help your firm and it’s focus on quality. 
Exploring SSARS No. 21 Toolkit
The PCPS Exploring SSARS No. 21 Toolkit provides insight into the key points of the standard and helps you apply It in your reviews, compilations, and engagements to prepare financial statements. The toolkit contains resources that summarize what’s new or different, help you get your staff up-to-speed on the changes and communicate with clients.
PCPS Independence Toolkit
CPAs must be ever so vigilant to understand the meaning of true independence.  As a refresher or a tool for training, elements of this toolkit can help you and your team members apply the latest independence rules to everyday practice. 
Clarified Auditing Standards Toolkit
The Clarified Auditing Standards are effective for engagements to audit financial statements for periods ending on or after December 15, 2012.  These standards impact engagements at all phases. You can use the toolkit resources to learn about the changes, train your staff and communicate with clients about the changes that impact them.
FRF for SMEs Toolkit
The Financial Reporting Framework for Small and Medium Entities (FRF for SMEs) provides an opportunity for your firm to showcase your role as the trusted business advisor to Main Street businesses.  Use the resources in the FRF for SMEs Toolkit to learn about this reporting framework that meets the unique reporting needs of owner-managed private companies that don’t require GAAP financial statements. 

14. Preparation of Financial Statements
SSARS 21- Implementation Checklist
SSARS 21-Engagement Evaluation
PCPS Exploring SSARS No. 21 Toolkit 
SSARS Engagement Letter Comparison
AICPA Standards Tracker
Clarity Long deck

15. Compilation Engagements

16. Compilation Engagements
Compilation & Review Changes Effective Now: SSARS No. 23 Amendments Requiring Your Attention 

17. Compilation Engagements
AR-C section 80 applies when the accountant is engaged to perform a compilation engagement
Other than the applicability and reporting requirements, the compilation literature is largely unchanged from SSARS No. 19

18. Compilation Engagements
Retains the independence requirements from the SSARS 19.
Requires an engagement letter signed by both the accountant and management/those charged with governance
Can be applied to financial statements with or without disclosures.

19. Compilation Engagements
Primary difference from SSARS No. 19 is in the reporting requirements
Report is always required.
Report is shortened to differentiate from audit and review (assurance) reporting
Management use only financial statements are be covered by the preparation standard
Not required to include a reference on each page of the financial statements to the report.

20. Example - Accountant’s Compilation Report
Management is responsible for the accompanying financial statements of XYZ Company, which comprise the balance sheets as of December 31, 20X2 and 20X1 and the related statements of income, changes in stockholder’s equity, and cash flows for the years then ended, and the related notes to the financial statements in accordance with accounting principles generally accepted in the United States of America. I (We) have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. I (we) did not audit or review the financial statements nor was (were) I (we) required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, I (we) do not express an opinion, a conclusion, nor provide any form of assurance on these financial statements.
I know they can’t see this well – Really just to show it is one paragraph

21. Comp. Report – Add’l paragraphs
When financial statements are prepared in accordance with a Special Purpose Framework/OCBOA
Disclosures omitted
Lack of independence

22. Comp. Report – Add’l paragraphs
Known Departure From the Applicable Financial Reporting Framework
Required to disclose known departures from the FRF in the accountant’s compilation report
When the accountant becomes aware of a departure from the FRF that is material to the financial statements and the financial statements are not revised, the accountant is required to consider whether modification of the standard report is adequate to disclose the departure
Supplementary Information Accompanies Financial Statements and the Accountant’s Compilation Report Thereon

23. SSARS No. 22, Compilation of Pro Forma Financial Statements
Issued September 2016
Clarity redraft of AR section 120
Effective for compilation reports on pro forma financial information dated on or after May 1, 2017.
SSARS No. 23 Compilation and Review Amendments Effective Now 
SSARS No. 23, Omnibus Statement on Standards for Accounting and Review Services—2016, amendments to the accountant’s review report and compilation report, related to supplementary information that accompanies the financial statements, are effective now and should be reflected in reports if applicable. Furthermore, SSARS No. 23 amendments to the guidance on reporting known departures from the applicable financial reporting framework in a compilation engagement are effective now and need to be complied with as well. 
SSARS No. 23 was issued on October 25, 2016 and introduces a number of amendments to the review, compilation, and preparation literature. The timing of the issuance of SSARS No. 23 coupled with the immediate effective date for some of its amendments may result in situations where yearend compilation and review engagements may not be in compliance with the amendments. Noncompliance with the amendments could possibly result in peer review implications. Popular third party practice aids, used by many member firms for quality control, are unlikely to have updated reporting language. The more important SSARS No. 23 amendments that are effective now and practitioners need to comply with are summarized below.
Review Engagements: Supplementary Information That Accompanies Reviewed Financial Statements and the Accountant’s Review Report: When supplementary information accompanies reviewed financial statements and the accountant’s review report thereon, AR-C requires that the accountant clearly should indicate the degree of responsibility, if any, the accountant is taking with respect to such information in either an other-matter paragraph in the accountant’s review report on the financial statements or a separate report on the supplementary information. Specific changes are identified in the SSARS No. 23 AR-C and AR-C  
Compilation Engagements: Supplementary Information That Accompanies Financial Statements and the Accountant’s Compilation Report: Similar to the requirements in the review engagement literature, when supplementary information accompanies financial statements and the accountant’s compilation report thereon, AR-C requires that the accountant clearly indicate the degree of responsibility, if any, the accountant is taking with respect to such information in either a separate paragraph in the accountant’s compilation report on the financial statements or a separate report on the supplementary information. AR-C and highlight the changes made to the language of the separate paragraph in the accountant’s compilation report on the financial statements or the separate report on the supplementary information.
Compilation Engagements: Reporting Known Departures from the Applicable Financial Reporting Framework:SSARS No. 23 amended the guidance in AR-C 80 related to reporting known departures from the applicable financial reporting framework (for example, a U.S. GAAP departure). These amendments, effective upon the issuance of SSARS 23 are presented in SSARS No. 23 AR-C and AR-C
Clarity Long deck

24. SSARS No. 23 Omnibus SSARS - 2016
Issued in October 2016
Revisions to AR-C sections 70 and 80 so that it applies to preparation and compilation of PFI, respectively
Examinations and AUP of PFI remain in SSAEs
Reviews of PFI are prohibited
Effective date –prospective financial information prepared on or after May 1, 2017/compilation reports on PFI dated on or after May 1, 2017
Revised AICPA Guide Prospective Financial Information to include additional authoritative guidance
Guide includes suitable criteria for the preparation and presentation of PFI (not prohibited from preparing or performing a compilation on PFI in accordance with other suitable criteria)
Preparation and Compilation of Prospective Financial Information: SSARS No. 23 Changes Effective May 1, 2017 
By: Robert J. Durak June 21, View the report as a PDF Practitioners who provide services related to their clients’ forecasts, projections, future budgets, and other forms of prospective financial information should be aware that certain changes affecting the related professional literature took effect on May 1, SSARS No. 23, Omnibus Statement on Standards for Accounting and Review Services—2016, and Statement on Standards for Attestation Engagements (SSAE) No. 18, Attestation Standards: Clarification and Recodification, amend the professional literature related to services on prospective financial information. Practitioners who perform services related to their client’s forward-looking financial information are required to gain familiarity and comply with the changes introduced by SSARS No. 23 and SSAE No. 18 (see our recent report on SSAE No. 18).  Practice Note: SSARS No. 23 was issued in October 2016 and certain of its amendments were effective immediately. In particular, amendments to the accountant’s review report and compilation report, related to supplementary information that accompanies the financial statements, are effective now and should be reflected in reports if applicable. Furthermore, amendments to the guidance on reporting known departures from the applicable financial reporting framework in a compilation engagement are effective now and need to be complied with as well. See our report on SSARS 23. Prospective financial information is any financial information about the future. The information may be presented as complete financial statements or limited to one or more elements, items, or accounts. Prospective financial information often is referred to by several different names, such as budgets, feasibility studies, and break-even analyses. Prospective financial information can be either a forecast or a projection. The AICPA Prospective Financial Information Guide (PFI Guide) provides definitions of these terms, as well as extensive guidance on the topic. Practice Note: Budgets for expired periods are not prospective financial information. Prospective financial information is financial information about the future and, therefore, does not encompass financial information about expired periods. In addition, pro forma financial information is not prospective financial information. Such presentations 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. Although the transactions in question may be prospective, such presentations are essentially historical statements and do not purport to be prospective financial statements. Revamped Professional Literature for Prospective Financial Information SSARS No. 23 establishes new standards for preparation services on prospective financial information, effective for such information prepared on or after May 1, It also replaces the previous standards on compilations of prospective financial information, effective for reports dated on or after May 1, 2017.   The attestation standards prior to the issuance of SSAE No. 18 contained requirements and guidance on compilations of prospective financial information. With the issuance of SSAE No. 18, that guidance has been removed from the attestation standards. SSARS No. 23, as noted above, replaces the previous standards on compilations of prospective financial information found in the attestation literature. SSAE No. 18 continues to provide guidance and requirements for examinations and agreed-upon procedures engagements related to prospective financial information. Professional Standards Applicable to Services on Prospective Financial Information
Pre-SSARS No. 23 &  SSAE No. 18
Level of Service1
Post SSARS No. 23  & SSAE No. 18
Preparation Assembly of prospective financial information not intended for third party use was addressed in the AICPA Guide, Prospective Financial Information. If assembled prospective financial information was intended for third party use, the practitioner was required to, at a minimum, perform a compilation of such information.        AR-C 70, Preparation  of Financial  StatementsCompilationAT 301, Financial Forecasts and ProjectionsAR-C 80, Compilation EngagementsExaminationAT 301AT-C 305, Prospective Financial Information        Agreed-Upon-Procedures (AUP)         AT 301AT-C 305 CPEA Observation. As displayed in the chart above, the professional literature associated with services on prospective financial information is now better aligned, with preparation and compilation services repositioned into the SSARSs literature and examinations and AUP engagements remaining in the attestation (SSAE) literature. Preparation of Prospective Financial Information The issuance of SSARS No. 23 amends the applicability of AR-C section 70 so that the section applies to the preparation of prospective financial information. Under the previous guidance in AT 301, if a practitioner assembled and submitted prospective financial information that was expected to be used by a third party or reported on prospective financial statements that were expected to be used by a third party, the practitioner was required to perform either a compilation, examination, or AUP engagement. Now, a practitioner, if engaged to prepare prospective financial information but not engaged to perform a compilation, examination or agreed-upon procedures engagement on such prospective financial information, would perform the engagement in accordance with AR-C section 70 – regardless as to whether the prospective financial information is expected to be used by third parties.  The result would be prospective financial information prepared by the practitioner and used by a third party without the practitioner having to issue a report (as long as the requirements of AR-C section 70 are followed). In addition to amending the applicability of AR-C section 70 so that it applies to engagements to prepare prospective financial information, the specific amendments made by SSARS No. 23 relative to preparing prospective financial information are:
Clarifies that the PFI Guide provides comprehensive guidance regarding prospective financial information including suitable criteria for the preparation and presentation of prospective financial information
Clarifies that the practitioner is not prohibited from preparing prospective financial information prepared and presented in accordance with other suitable criteria. Other criteria, outside the PFI Guide, may be suitable for the preparation and presentation of prospective financial information. In such instances, the guidance in the PFI Guide may need to be adapted as necessary in the circumstances or may not be applicable. 
Includes a requirement that because the summary of significant assumptions is essential to the user’s understanding of prospective financial information, the practitioner should not prepare prospective financial information that excludes disclosure of the summary of significant assumptions. Also, the practitioner should not prepare a financial projection that excludes either an identification of the hypothetical assumptions or a description of the limitations on the usefulness of the presentation. These requirements apply even when prospective financial information is prepared that omits substantially all disclosures (see below). 
When Does AR-C 70 Apply to Prospective Financial Information? AR-C 70 applies when the practitioner is engaged to prepare prospective financial information but not engaged to perform a compilation, examination, or agreed-upon procedures engagement on such information - regardless of who may be the end users. There may be several different users of prospective financial information, such as management, bankers, bonding agents, regulators, and other third parties or the information may be intended for management use only. In addition, AR-C 70 applies when a practitioner in public practice provides an entity with controllership or other financial management services and is engaged to prepare prospective financial information as part of the controllership or other management services agreement. AR-C 70 does not apply to practitioners who are not in public practice. Additionally, AR-C 70 does not apply when a practitioner in public practice prepares prospective financial information
in conjunction with litigation services that involve pending or potential legal or regulatory proceedings; or 
for inclusion in written personal financial plans prepared by the practitioner; 
Practice Note: Professional judgment needs to be applied by the practitioner to determine if the practitioner is requested to prepare the prospective financial information or merely assist in preparing the prospective financial information. Assisting in preparing or drafting a portion of the prospective financial information is not subject to AR-C 70. Financial Reporting Framework/Presentation Guidelines The term financial reporting framework as used in AR-C section 70, is interpreted to mean the AICPA presentation guidelines established by the PFI Guide (chapter 8) or other suitable criteria. Accordingly, provisions in the SSARSs regarding the financial reporting framework disclosures and reporting that do not relate to disclosures called for by the AICPA presentation guidelines (or other suitable criteria) are treated as not applicable to preparation of prospective financial information. Additionally, as a condition for accepting an engagement to prepare prospective financial information, the practitioner is required to obtain the agreement of the responsible party that it acknowledges and understands its responsibility for the use of the AICPA presentation guidelines (or other suitable criteria) in the preparation of prospective financial information. Practice Note: The responsible party is the person or persons who are responsible for the assumptions underlying the prospective financial information. The responsible party usually is management. For many smaller clients, the practitioner will help the responsible party select the framework (basis of accounting) to be used in applying the AICPA presentation criteria. The practitioner is permitted to provide such advice, and this provides the practitioner with an opportunity to help the responsible party understand the various frameworks that may be applicable. The practitioner also may help management assess the needs of third-party users of the prospective financial information, such as lenders, potential investors, or owners. Disclosure of the Summary of Significant Assumptions Paragraph .19 of AR-C 70, as amended by SSARS No. 23, indicates that the practitioner should not prepare prospective financial information that
in conjunction with business valuation services. 
CPEA Observation. The requirement to disclose the summary of significant assumptions (or in the case of a financial projection, to include an identification of the hypothetical assumptions and a description of the limitations on the usefulness of the presentation) is a key amendment made by SSARS No. 23. The previous guidance in AT 301 contained a similar requirement for compilations of prospective financial information. However, as noted above, AT 301 did not apply when the accountant assembled prospective financial information that was not expected to be used by a third party. As such, practitioners may have assembled and submitted budgets and other prospective financial information without disclosing a summary of significant assumptions as long as such budgets and other prospective financial information were only for the use of the client. Now, when a client hires a practitioner to prepare prospective financial information, the summary of significant assumptions is required even if that prospective financial information is not going to be shared with third parties. Chapter 8 of the PFI Guide contains guidance about significant assumptions and chapter 9 contains illustrative examples of summaries of significant assumptions. Practitioners who have not previously prepared a summary of significant assumptions will find that guidance helpful. Omitting Substantially All Disclosures. While the summary of significant assumptions is required to be disclosed, practitioners may prepare prospective financial information that omits substantially all other disclosures required by the AICPA presentation guidelines. When substantially all disclosures are omitted, the practitioner should disclose such omission either on the face of the prospective financial information or in a selected note disclosure.  Compilation of Prospective Financial Information The specific amendments made by SSARS No. 23 relative to the compilation of   prospective financial information are:
In the case of a financial projection, excludes either an identification of the hypothetical assumptions or a description of the limitations on the usefulness of the presentation. 
Excludes the summary of significant assumptions; or 
Clarifies that the AICPA PFI Guide provides comprehensive guidance regarding prospective financial information including suitable criteria for the preparation and presentation of prospective financial information, and clarifies that the accountant is not prohibited from performing a compilation engagement on prospective financial information prepared and presented in accordance with other suitable criteria 
Expands the subject matter to which AR-C 80 should be applied to include prospective financial information 
Indicates that the accountant should not issue a compilation report on prospective financial information that excludes disclosure of the summary of significant assumptions. Also, the accountant should not issue a compilation report on a financial projection that excludes either an identification of the hypothetical assumptions or a description of the limitations on the usefulness of the presentation. 
Adds the following reporting elements to the accountant’s compilation report:
A statement that the forecasted or projected results may not be achieved 
CPEA Observation. As discussed above, the professional literature for performing a compilation engagement on prospective financial information was moved from the attestation standards (AT 301) to the SSARSs (AR-C 80). The focus of AR-C 80 was on historical financial information, not prospective. SSARS No. 23 resulted in the incorporation of certain provisions related to the compilation of prospective financial information contained in AT 301 to AR-C 80. As such, practitioners who have been performing compilations under AT 301 should not find any difficulty in complying with the amendments made by SSARS No. 23. However, a compilation performed in accordance with AR-C section 80 contains certain significant differences from a compilation performed in accordance with AT section 301.
A statement that the accountant assumes no responsibility to update the report for events and circumstances occurring after the date of the report 
The CPEA provides non-authoritative guidance on accounting, auditing, attestation, and SSARS standards. Official AICPA positions are determined through certain specific committee procedures, due process and extensive deliberation. The views expressed by CPEA staff in this report are expressed for the purposes of providing member services and other purposes, but not for the purposes of providing accounting services or practicing public accounting. The CPEA makes no warranties or representations concerning the accuracy of any reports issued.
 1Practitioners are prohibited from performing reviews of prospective financial information.
Copyright © 2017 by American Institute of Certified Public Accountants, Inc. New York, NY All rights reserved. For information about the procedure for requesting permission to make copies of any part of this work, please your request. Otherwise, requests should be written and mailed to the Center for Plain English Accounting, AICPA, 220 Leigh Farm Road, Durham, NC
Clarity Long deck

25. Preparation and Compilation of PFI
Because the summary of significant assumptions is essential to the user’s understanding of PFI, the accountant should not prepare PFI that excludes
Disclosure of the summary of significant assumptions or
A financial projection that excludes either
an identification of the hypothetical assumptions or
a description of the limitations on the usefulness of the presentation
Clarity Long deck

26. Supplementary Information That Accompanies Compiled Financial Statements and the Accountant’s Compilation Report Thereon
Clearly indicate the degree of responsibility, if any, the accountant is taking with respect to such information in either
an OM paragraph in the accountant’s compilation report on the financial statements or
a separate report on the supplementary information
I know they can’t see this well – Really just to show it is one paragraph

27. Review of Financial Statements

28. Review of Financial Statements
AR-C section 90 applies to all reviews of historical financial information – excluding pro forma financial information (which is covered by the attestation standards)
Requires an engagement letter signed by both the accountant and management/those charged with governance 28
Clarity Long deck

29. Review Performance Procedures
A review requires the accumulation of review evidence that will provide the accountant with limited assurance that there are no material modifications that should be made to the f/s.
The accountant uses professional judgment to determine specific procedures 29

30. Review Performance Procedures
Review procedures are tailored based on the accountant’s:
Understanding of the industry
Knowledge of the client
Awareness of the risk that he or she may unknowingly fail to modify the accountant’s review report on f/s that are materially misstated
Required to perform analytical procedures and inquires in all review engagements
May perform procedures in addition to analytical procedures and inquiries 30

31. Analytical Procedures in a Review Engagement31 31

32. Analytical Procedures in a Review Engagement
Analytical procedures are required in all review engagements
Purpose is to identify relationships and individual items that may reflect a material misstatement in the financial statements
Use of analytical procedures is different than in an audit
The accountant is not required to perform analytical procedures in planning or overall review stages of the engagements
In a review, results of analytical procedures are review evidence that supports the review report 32

33. Management Representation Letter33 33

34. Management Representation Letter
A representation letter is required for all financial statements and periods covered by the accountant’s review report.
Required even if current management was not present during all periods covered by the accountant’s review report. 34

35. Management Representation Letter
Management’s representations should be as of the date of the accountant’s review report.
The accountant need not be in physical receipt of the rep letter as of the date of the accountant’s review report
The rep letter should be received prior to release of the report
The representation letter should be signed by those members of management that the accountant believes are responsible for and knowledgeable about the matters covered in the rep letter.
Normally the CEO and the CFO sign the rep letter. 35

36. Review of Financial Statements
Reporting on financial statements
Requires the use of headings in the accountant’s review report
Required to name the city and state of the issuing office
May be included on letterhead
Not required to include a reference on each page of the financial statements to the report. 36
Clarity Long deck

37. Example - Accountant’s Review Report
Independent Accountant’s Review Report [Appropriate Addressee] I (We) have reviewed the accompanying financial statements of XYZ Company, which comprise the balance sheets as of December 31, 20X2 and 20X1, and the related statements of income, changes in stockholders’ equity, and cash flows for the years then ended, and the related notes to the financial statements. A review includes primarily applying analytical procedures to management’s (owners’) financial data and making inquiries of company management (owners). A review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, I (we) do not express such an opinion.
I know they can’t see this well – Really just to show it is one paragraph

38. Example - Accountant’s Review Report
Management’s Responsibility for the Financial Statements Management (Owners) is (are) responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement whether due to fraud or error.
I know they can’t see this well – Really just to show it is one paragraph

39. Example - Accountant’s Review Report
Accountant’s Responsibility My (Our) responsibility is to conduct the review engagements in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. Those standards require me (us) to perform procedures to obtain limited assurance as a basis for reporting whether I am (we are) aware of any material modifications that should be made to the financial statements for them to be in accordance with accounting principles generally accepted in the United States of America. I (We) believe that the results of my (our) procedures provide a reasonable basis for our conclusion.
I know they can’t see this well – Really just to show it is one paragraph

40. Example - Accountant’s Review Report
Accountant’s Conclusion Based on my (our) reviews, I am (we are) not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in accordance with accounting principles generally accepted in the United States of America. [Signature of accounting firm or accountant, as appropriate] [Accountant’s city and state] [Date of the accountant’s review report]
I know they can’t see this well – Really just to show it is one paragraph

41. Supplementary Information That Accompanies Reviewed Financial Statements and the Accountant’s Review Report Thereon
Clearly indicate the degree of responsibility, if any, the accountant is taking with respect to such information in either
an OM paragraph in the accountant’s review report on the financial statements or
a separate report on the supplementary information
I know they can’t see this well – Really just to show it is one paragraph

42. Supplementary Information That Accompanies Reviewed Financial Statements and the Accountant’s Review Report Thereon
When the accountant has subjected the supplementary information to the review procedures applied in the accountant’s review of the basic financial statements, the OM paragraph/separate report should state that
the SI is presented for purposes of additional analysis and is not a required part of the basic financial statements;
the SI is the responsibility of management and was derived from, and relates directly to, the underlying accounting and other records used to prepare the financial statements;
the SI has been subjected to the review procedures applied in the accountant’s review of the basic financial statements and whether the accountant is aware of any material modifications that should be made to the SI; and
the accountant has not audited the SI and does not express an opinion on such information.
I know they can’t see this well – Really just to show it is one paragraph

43. Supplementary Information That Accompanies Reviewed Financial Statements and the Accountant’s Review Report Thereon
When the accountant has not subjected the SI to the review procedures applied in the accountant’s review of the basic financial statements, the OM paragraph/separate report should state that
the SI is presented for purposes of additional analysis and is not a required part of the basic financial statements;
the SI is the responsibility of management; and
the accountant has not audited or reviewed the SI and, accordingly, does not express an opinion, a conclusion, nor provide any assurance on such information.
I know they can’t see this well – Really just to show it is one paragraph

44. Other Standard-setting Projects
Clarity Long deck

45. International Reporting Issues
Consideration of revisions to SSARSs to address
Financial statements prepared in accordance with foreign frameworks (not ISAs)
Compilation/review performed in accordance with international compilation/review standards
Can a compilation can be performed in accordance with both ISRS 4410 (Revised) and SSARSs?
Does AR-C section 90 needs revision to incorporate elements of ISRE 2400 (Revised)?
ARSC to consider issues and a draft standard at its meeting in May 2017
Expected exposure of proposed standard in second half of 2017 and potential final standard in 2018

46. Selected Procedures Joint project between the ASB and the ARSC
Engagement driven standard
Procedures/findings report
No party required to be responsible for sufficiency of the procedures
No requirement to request an assertion from the responsible party
Unrestricted report
Related to ASB project to develop non-assertion based examination and review standards
A common concepts chapter would address all non-assertion based standards (to be presented to the ARSC at its meeting in May 2017)
Expected exposure of proposed standards in second half of 2017)
Final standards expected in 2018
Clarity Long deck

47. Consideration of materiality
Materiality is an attribute of the financial reporting framework
Does not change based on service
Ethics requires that a member not be associated with materially misstated or misleading financial statements

48. Helpful Information and Resources
Authoritative standards for non-issuers (SASs, SSARSs, SSAEs, SQCSs) as of June 1 are available at
AICPA Accounting and Auditing Technical Hotline
(877)

49. Center for Plain English Accounting
AICPA PCPS national A&A resource center for firms
aicpa.org/CPEA
Services:
Written responses to written technical inquiries
Monthly “how-to” A&A reports
Webcasts
Alerts
Content for firm newsletters

50. Questions?