Statements of Position



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Periodically, the Accounting and Review Services Committee (ARSC) issues an Omnibus Statement. The Omnibus includes proposed revisions to existing Statements on Standards for Accounting and Review Services (SSARSs) that have been accumulated over a period of time. The proposed revisions due to the significance of the issues and cost benefit considerations do not in and of themselves warrant the issuance of separate standards. Therefore, an Omnibus is issued. 1. The auditing literature allows an accountant who may be associated with financial statements of a public company, but has not audited or reviewed such statements, to state that he or she has not audited the unaudited information and includes example report wording. This guidance is also appropriate for compilation and review engagements; however, SSARSs currently do not include example wording. This amendment will revise SSARS No. 1, Compilation and Review of Financial Statements (AICPA, Professional Standards, vol. 2, AR sec. 100.03), to include wording that may be appropriate under the circumstances. 2. The accounting literature does not require the statement of retained earnings to be presented as a financial statement. Accounting Principles Board Opinion No. 12, Omnibus Opinion—1967, requires disclosure of a change in capital. This can be done by preparation of a separate statement in the notes to the financial statements or as part of another basic statement. In addition, the example reports currently do not refer to the statement of comprehensive income. This amendment will include two footnotes to SSARS No. 1 (AR sec. 100.14 and AR sec. 100.36), stating (1) the statement of retained earnings is not a required statement and, if not presented as a separate statement, reference in the compilation and review report is not needed and (2) if the statement of comprehensive income is presented, reference should be made in the appropriate paragraphs of the report. 3. SSARSs currently do not specifically require a signature of the accounting firm or the accountant on a review or compilation report. This proposed amendment will revise SSARS No. 1 (AR sec. 100.11 and 100.33) to require a signature. The guidance in AR section 100.12 and 100.13 has been deleted and included in AR section 100.11; guidance in AR section 100.34 and 100.35 has been deleted and included in AR section 100.33. 4. The current guidance found in SSARS No. 1 (AR sec. 100.29) requires the accountant to obtain a representation letter from management. The guidance is not specific about the content of the letter, the dating of the letter, and current management's responsibility regarding previous years. This amendment will require specific representations for the accountant to receive from management when performing a review engagement and will provide guidance on the dating of the letter and guidance regarding obtaining representations from current management when they were not present during all periods covered by the accountant's report. 5. SSARS No. 1 (AR sec. 100.44) includes the guidance on reporting for supplementary information. Currently the guidance is unclear with respect to separate reporting on supplementary information in a compilation engagement. This proposed amendment would explicitly allow for a separate report on supplementary information in a compilation engagement, consistent with guidance on supplemental information in a review report. 6. SSARSs currently do not refer to the Statements on Quality Control Standards (SQCSs) and how those standards interact with SSARSs. The proposed amendment will clarify that although an effective quality control system is conducive to compliance with SSARSs, deficiencies in or noncompliance with a firm's quality control system do not, in and of themselves, indicate that an engagement was not performed in accordance with the applicable professional standards. This amendment would be included after the last section of SSARS No. 1 (before the Effective Date). 7. SSARS No. 4, Communications Between Predecessor and Successor Accountants (AICPA, Professional Standards, vol. 2, AR sec. 400), provides guidance on communications between accountants when the successor accountant decides to communicate with the predecessor regarding acceptance of an engagement. This amendment defines predecessor and successor accountants, provides guidance regarding acceptance of an engagement, suggests inquiries the successor accountant may decide to ask the predecessor accountant, and includes an example successor accountant acknowledgment letter, which the predecessor may want to use in connection with granting access to the working papers. The proposed amendments would revise SSARS No. 1 and SSARS No. 4.



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Financial statements -- Standards -- United States


Accounting | Taxation


Originally published by: American Institute of Certified Public Accountants; Copyright and permission to reprint held by: American Institute of Certified Public Accountants; Exposure draft (American Institute of Certified Public Accountants), 2002, Aug. 1

Proposed statement on standards for accounting and review services, Omnibus -- 2002;Omnibus -- 2002



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