Statements of Position



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The Accounting and Review Services Committee is issuing this proposed Statement for the reasons set forth in the preceding letter. In brief, those reasons are as follows: 1. Every entity needs timely financial information for management's use but management may not need that information in the form of financial statements that comply in all material respects with generally accepted accounting principles (GAAP) or another comprehensive basis of accounting. Many large public companies obtain this kind of information by using a "soft close," which eliminates many adjustments required for GAAP financial statements. However, Statement on Standards for Accounting and Review Services (SSARS) 1 requires the CPA for a small, nonpublic entity to issue a compilation report that describes departures from such principles. Moreover, SSARS 1, combined with CPA firm quality control procedures designed for compilation reports that may be used by third parties, adds cost and delay to the process of providing clients with the service they need. 2. Existing compilation standards, coupled with advances in technology, have created a situation where the decision on whether to issue a compilation report may hinge on technicalities such as who instructs a computer to print the financial statements and, as a result, have created wide variances in practice. The proposed Statement is conceptually consistent with the "assembly" provisions of the attestation standard governing forecasts and projections. It would: 1. Define the assembly of financial statements. 2. Provide an optional exemption from the requirements of SSARS 1, including its reporting requirements, for the unaudited financial statements of a nonpublic entity assembled for internal use only. 3. Require a written understanding with the nonpublic entity when the accountant is engaged to assemble financial statements for internal use only. 4. Provide an optional legend for each page of the financial statements indicating that they are restricted to internal use only, with a reference to the engagement letter. This proposed Statement would not affect existing standards for the compilation or review of financial statements.

Publication Date


Relational Format



Financial statements -- United States; Financial statements, Unaudited -- 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.

Proposed statement on standards for accounting and review services : assembly of financial statements for internal use only ;Assembly of financial statements for internal use only; Exposure draft (American Institute of Certified Public Accountants), 1995, Sept. 6



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