Statement on Standards for Accounting and Review Services No. 17, Omnibus Statement on Standards for Accounting and Review Services – 2008:
- Revises AR section 100, Compilation and Review of Financial Statements; AR section 200, Reporting on Comparative Financial Statements; and AR section 300, Compilation Reports on Financial Statements Included in Certain Prescribed Forms (AICPA, Professional Standards, vol. 2), to conform to the terminology utilized by other standard setters, including the Auditing Standards Board, by replacing the term nonpublic entity with the term nonissuer. Generally, a nonpublic entity as currently defined in AR section 100.04 is considered a nonissuer under the revised definition.
- Revises the definition of compilation of financial statements in paragraph 100.04 and clarifies the objective of a compilation engagement as an engagement in which no assurance is provided and incorporating such objective in a new section entitled “Objective of a Compilation Engagement.” In addition, the illustrative engagement letter for a compilation of financial statements and the illustrative engagement letter for a compilation of financial statements not intended for third party use are revised to incorporate the stated objective.
- Revises the definition of review of financial statements in AR section 100.04; revises and incorporates the objective of a review engagement in a new section entitled “Objective of a Review Engagement;” and revises AR section 100.26 to state that, in a review engagement, the accountant must (1) apply analytical procedures to the financial statements; (2) make inquires of management or other company personnel, or both; and (3) obtain representations from management for all financial statements and periods covered by the accountant’s review report. AR section 100.31 is also revised to properly state the above requirement with respect to analytical procedures.
- Revises the definition of third parties in AR section 100.04 to clarify that the phrase “who are knowledgeable about the nature of the procedures applied and the basis of accounting and assumptions used in the preparation of financial statements” applies to “members of management.”
- Introduces a definitions of those charged with governance and managementto AR section 100.04.
- Revises AR section 100.36 and 100.89 to state that since review procedures include obtaining representations from management that they have taken responsibility for all financial statements and periods covered by the accountant’s review report, and since the accountant’s review report should be dated as of the completion of the accountant’s review procedures, as well as the fact that the accountant is concerned with events occurring through the date of the review report that may require adjustment to or disclosure in the financial statements, management’s written representations should be made as of the date of the accountant’s review report.
- Provides guidance with respect to an accountant’s consideration of the entity’s ability to continue as a going concern during the performance of compilation or review procedures.
- Provides guidance with respect to an accountant’s consideration of subsequent events in a compilation or review engagement.
- Deletes the word primarily from AR section 100.70 (Supplementary Information) which stated that “the review has been made primarily for the purpose of expressing limited assurance that there are no material modifications that should be made to the financial statements in order for them to be in conformity with generally accepted accounting principles.”
- Incorporates guidance with respect to analytical procedures in a review engagement as an exhibit to the Codification of Statements on Standards for Compilation and Review Services.
SSARS No. 17 is effective for compilations and reviews of financial statements for periods ending on or after December 15, 2008. Early application is permitted.