New Compilation and Review Engagements Standard 


    In December 2009, the Accounting and Review Services Committee (ARSC) issued Statement on Standards for Accounting and Review Services (SSARS) No. 19, Compilation and Review Engagements, which includes the most significant changes to the compilation and review standards since 1978. "The new standard makes important changes that should be welcomed and applauded by many smaller firm practitioners," says Carol McNerney, chair of the ARSC and a partner with the firm of SS&G Financial Services in Akron, Ohio.

    The standard’s effective date is for periods ending on or after December 15, 2010, with the exception of paragraph 2.21, which may be implemented early. Paragraph 2.21 (AR sec. 80 par. .21) states in part, "The accountant is not precluded from disclosing a description about the reason(s) that his or her independence is impaired." According to McNerney, this particular change has long been supported by many smaller firm CPAs as well as users of compilation reports.

    Another significant change that smaller firms should appreciate is that this new standard separates the compilation guidance from the review guidance. Other significant changes to SSARSs, as the result of this project, include the following:
    • A discussion of how the accountant obtains limited assurance through the performance of review procedures.
    • The introduction of the term review evidence to the review literature.
    • A discussion of tailoring the review procedures based on the accountant’s understanding of the client’s industry, knowledge of the client, and awareness of the risk that he or she may unknowingly fail to modify the accountant’s review report on financial statements that are materially misstated.
    • A discussion of materiality in the context of a review engagement.
    • A requirement that an accountant document the establishment of an understanding with management through a written communication (that is, an engagement letter) regarding the services to be performed.
    • The establishment of enhanced documentation requirements for compilation and review engagements.

    The AICPA Compilation and Review Engagements Guide helps you understand the new standard for successful implementation on your engagements.



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