Statements of Position

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Description

Statements on Standards for Accounting and Review Services (SSARS) currently provide guidance concerning the standards and procedures applicable to compilations and reviews of financial statements. By definition, presentations of specified elements, accounts, or items of a financial statement, or pro forma financial information are not financial statements. This proposed Statement will allow an accountant to compile and report on specified elements, accounts, or items of a financial statement and to compile and report on pro forma financial information in accordance with SSARS. It should be noted that this proposed standard would apply when an accountant is engaged to compile, or does issue a compilation report on, specified elements, accounts, or items of a financial statement or pro forma financial information. The ARSC recognizes that this approach is inconsistent with Statements on Standards for Accounting and Review Services (SSARS) No. 1 through No. 11. Those Statements set forth performance and communication requirements when an accountant submits unaudited financial statements of a nonpublic entity to his or her client or to third parties (SSARS No. 8, Amendment to Statements on Standards for Accounting and Review Services No. I, Compilation and Review of Financial Statements [AICPA, Professional Standards, vol. 2, AR sec. 100], allows the accountant to either report on management use only financial statements, or document an understanding with the entity through the use of an engagement letter regarding the services to be performed and the limitations on the use of the financial statements). The ARSC believes that this approach to specified elements, accounts, or items of a financial statement or pro forma financial information (subject matter that is less than a financial statement as defined by SSARS No. 1 [AR sec. 100.04]) responds best to user and member needs while at the same time protecting the interests of the public. This proposed Statement will not amend or revise the guidance in Chapter 4, "Reporting on Pro Forma Financial Information," of Statement on Standards for Attestation Engagements (SSAE) No. 10, Attestation Standards: Revision and Recodification (AICPA, Professional Standards, vol. 1, AT sec. 401), which provides guidance to a practitioner who is engaged to issue or does issue an examination or review report on pro forma financial information. Additionally, this proposed Statement will not amend or revise the guidance in Statement on Auditing Standards No. 62, Special Reports (AICPA, Professional Standards, vol. 1, AU sec. 623), as amended, which provides guidance when an independent auditor is requested to express an opinion on one or more specified elements, accounts, or items of a financial statement.

ISBN

ed05-03-18at

Publication Date

2005

Relational Format

Book

Keywords

Financial statements -- Standards -- United States; Pro forma statements (Accounting) -- Standards -- United States

Disciplines

Accounting | Taxation

Comments

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), 2005, March 18

Proposed statement on standards for accounting and review services : Compilation of specified elements, accounts, or items of a financial statement;Compilation of specified elements, accounts, or items of a financial statement

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