In June 2012, the AICPA’s
Professional Ethics Executive Committee (PEEC) issued the exposure draft
Proposed Revised and New Interpretations and Proposed Deletion of Ethics Rulings. This exposure draft includes a proposal to amend Interpretation No. 101-3, “Nonattest Services,” under Rule 101,
Independence (AICPA,
Professional Standards, ET sec. 101 par. .05), to make clear that certain services, including financial statement preparation, would be a nonattest service.
Concurrently, the AICPA’s
Accounting and Review Services Committee (ARSC) issued the exposure draft
Proposed Statements on Standards for Accounting and Review Services Association With Unaudited Financial Statements; Compilation of Financial Statements; and Compilation of Financial Statements—Special Considerations that would, among other things, amend when the compilation standard applies and what action a CPA should take when the CPA has been involved in preparing financial statements but has not been engaged to perform a compilation, review, or audit engagement.
The comment period on the exposure drafts has closed; however, the comment letters that were received are available
online.
In January 2013, the ARSC
voted to withdraw the exposure draft of the proposed SSARSs
Association
With Unaudited Financial Statements; Compilation of Financial
Statements; and Compilation of Financial Statements – Special
Considerations. The decision to withdraw the exposure draft was in
response to comments contained in the 92 comment letters that were
received on the exposure draft. The compilation proposal would have
revised the applicability of the compilation standard but would have
retained the compilation service as an attest service. The association
proposal addressed the accountant’s responsibilities when a member is
associated with financial statements that have not been compiled,
reviewed or audited. The exposure draft proposed that certain legends,
notations or disclaimer language would be placed on or with the
financial statements when the accountant prepares financial statements
but has not compiled, reviewed, or audited the financial statements.
After reviewing the comment letters at its meeting in January 2013, the
ARSC noted that certain commenters suggested that the compilation
service be positioned as a nonattest service consistent with the
positioning of preparation of financial statements. A second concern was
confusion between the proposed standards and the views of many
respondents that they needed to be combined and simplified. The ARSC
immediately began work on a new proposal that will respond to these
major concerns.
Further, Chuck Landes has created an insightful blog post on the AICPA Insights blog.
"Why Financial Statement Preparation is Proposed to Be a Nonattest Service" discusses the changes to the standards in an easy to understand format.
Exposure Drafts
The comment period for these exposure drafts ended November 30, 2012.
Professional Ethics Executive Committee
Proposed Revised and New Interpretations and Proposed Deletion of Ethics Rulings
Affected Standards
The changes as a result of the exposure draft
Proposed Revised and New Interpretations and Proposed Deletion of Ethics Rulings, proposed by PEEC, would affect the following rules:
- Rule 101 (revision of Interpretation 101-3 under Rule 101)
Accounting and Review Services Committee
Note that the ARSC has withdrawn the following exposure draft. The following is for historical information only.
Proposed Statements on Standards for Accounting and Review Services Association With Unaudited Financial Statements; Compilation of Financial Statements; and Compilation of Financial Statements—Special Considerations
This release contains the following exposure drafts:
- Proposed Statement on Standards for Accounting and Review Services Association With Unaudited Financial Statements
- Proposed Statement on Standards for Accounting and Review Services Compilation of Financial Statements
- Proposed Statement on Standards for Accounting and Review Services Compilation of Financial Statements—Special Considerations
Affected Standards
The exposure draft Proposed Statements on Standards for Accounting and Review Services Association With Unaudited Financial Statements; Compilation of Financial Statements; and Compilation of Financial Statements—Special Considerations, proposed by ARSC, if issued as final standards, would affect the standards:
- Paragraphs 1.05–.06 and 2.01–.64 of SSARS No. 19, Compilation and Review Engagements (superseded)
- SSARS No. 13, Compilation of Specified Elements, Accounts, or Items of a Financial Statement, as amended (superseded)
- SSARS No. 3, Compilation Reports on Financial Statements Included in Certain Prescribed Forms, as amended (superseded)
- SSARS No. 6, Reporting on Personal Financial Statements Included in Written Personal Financial Plans (superseded)