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This course provides a comprehensive review of the current standards and issues in compilation, review and accounting service engagements. The cases included provide examples from the whole spectrum of practice management and engagement performance. All CPAs managing a compilation, review or accounting service engagements will benefit.
Highlights include cases involving SSARSs pronouncements, interpretations and technical practice aids. Also included are examples of peer review deficiencies, fraud and independence issues, quality control and engagement administration, reporting and special engagement issues.
Objectives:Manage a compilation, review and accounting service practice in conformity with all applicable current professional standards
Prerequisite: Managing compilation, review and accounting service engagements
733381
Overview
Course Objectives
Introduction
For many years, the accounting profession and the business community had two options with respect to the assurance a CPA could offer on financial statements. The CPA could perform an audit and provide reasonable assurance that the financial statements were prepared in accordance with generally accepted accounting principles (GAAP), or the CPA could be associated with unaudited financial statements and offer no assurance on the financial statements.
These two extreme options did not always satisfy the needs of the business community. In some circumstances, external parties wanted the CPA to take some responsibility for the correctness of the financial statements but were reluctant to demand an expensive audit from the client. In response to the needs of the business community, in 1978, the AICPA developed two types of engagements: compilations and reviews.
Although the AICPA has issued professional standards applicable to these engagements, the guidance is in many respects quite broad. This course provides guidance for the administration, performance, and reporting of compilation and review engagements. In addition, this course discusses and illustrates the professional standards that should be observed in the performance of a compilation or a review.
Of the more than 30,000 firms in the AICPA Peer Review Program, almost 18,000 perform reviews or compilations as their highest level of service.
Organization
This course covers the current standards and issues in performing compilation, review, and accounting services. The cases come from the whole spectrum of practice: professional standards, independence rules, engagement and representation letters, performance standards, disclosure, reporting, documentation, quality control, engagement administration, and special engagements.
This course is not intended to be a complete overview of compilations and reviews, but rather is intended to address issues that arise in a variety of compilation and review engagements. It is assumed that participants have a thorough understanding of the compilations and reviews.
The course is a combination of discussion, examples to illustrate the concepts, plus thoughtful questions and answers and cases to test the understanding of the concepts covered in the course.
The course is organized as follows:
Conclusion
This manual is designed to be a permanent learning tool. We hope your reading of this manual enriches your professional learning experience.
Note. We use the terms he and she alternately throughout the course (except when a particular person is mentioned) since both sexes are well represented in the accounting and auditing areas.
Chapter 1 - Compilations and Reviews - Introduction and Background
Learning Objectives
Accounting and Review Services Committee
Compilation and review engagements are governed by Statements on Standards for Accounting and Review Services (SSARS), which are issued by the Accounting and Review Services Committee (ARSC). ARSC is a senior technical committee of the AICPA charged with developing
...procedures and standards of reporting by CPAs on the types of accounting and review services a CPA may render in connection with unaudited financial statements or other unaudited information of an entity that is not required to file financial statements with a regulatory agency in connection with the sale or trading of its securities in a public market. This charge shall not include any of the responsibilities of the Accounting Standards Executive Committee.
ARSC is an outgrowth of a subcommittee of the Auditing Standards Board (ASB) created in 1975 to reconsider existing pronouncements applicable to a CPA's association with unaudited financial statements of nonpublic companies.
The charge above specifically limits the scope of the ARSC's authority to unaudited financial statements and unaudited information of nonpublic entities. Statements on Auditing Standards (SAS) issued by the ASB continue to provide guidance to CPAs who perform services in connection with audited financial statements of nonpublic entities.
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