Proposed Revisions to Ethics and Compilation Standards 


    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)
       



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