The final SSAE, like its ED, permits two levels of serviceexamination and reviewalthough use of the review report is restricted to specified parties and is not appropriate for filing with the SEC. The ASB also concluded in the development of the final SSAE that an MD&A presentation is a discrete single-year presentation that includes some comparative information but is not a comparative presentation. Therefore, the practitioner should not divide responsibility with a predecessor when performing this type of engagement. However, a practitioner may divide responsibility with another practitioner who has examined or reviewed the separate MD&A presentation of a component of the reporting entity.

The concept of published rules and regulations was replaced with rules and regulations adopted by the SEC (emphasis added) in both the SSAE and the SAS. The new language makes it clear that the criteria for measuring MD&A includes only those rules and regulations that the commission has formally adopted.

The board clarified language in the SAS to permit the performance of agreed-upon procedures with respect to items in an MD&A presentation that are subject to controls over financial reporting. This applies when the accountant does not perform a review or an examination of the MD&A presentation or does not attach or refer to a report on the MD&A presentation in a letter to an underwriter.

SSAE no. 8, Managements Discussion & Analysis, will be effective on issuance, and SAS no. 86, Amendment to Statement on Auditing Standards No. 72, Letters for Underwriters and Certain Other Requesting Parties, will be effective June 30, 1998, with earlier application permissible. Both statements will be available this spring from the AICPA order department at 800-862-4272.