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SSARS No. 23 Compilation and Review Amendments Effective Now 

SSARS No. 23, Omnibus Statement on Standards for Accounting and Review Services—2016, amendments to the accountant’s review report and compilation report, related to supplementary information that accompanies the financial statements, are effective now and should be reflected in reports if applicable. Furthermore, SSARS No. 23 amendments to the guidance on reporting known departures from the applicable financial reporting framework in a compilation engagement are effective now and need to be complied with as well.

SSARS No. 23 was issued on October 25, 2016 and introduces a number of amendments to the review, compilation, and preparation literature. The timing of the issuance of SSARS No. 23 coupled with the immediate effective date for some of its amendments may result in situations where yearend compilation and review engagements may not be in compliance with the amendments. Noncompliance with the amendments could possibly result in peer review implications. Popular third party practice aids, used by many member firms for quality control, are unlikely to have updated reporting language. The more important SSARS No. 23 amendments that are effective now and practitioners need to comply with are summarized below.

  • Review Engagements: Supplementary Information That Accompanies Reviewed Financial Statements and the Accountant’s Review Report: When supplementary information accompanies reviewed financial statements and the accountant’s review report thereon, AR-C 90.80 requires that the accountant clearly should indicate the degree of responsibility, if any, the accountant is taking with respect to such information in either an other-matter paragraph in the accountant’s review report on the financial statements or a separate report on the supplementary information. Specific changes are identified in the SSARS No. 23 AR-C 90.81 and AR-C 90.82.

  • Compilation Engagements: Supplementary Information That Accompanies Financial Statements and the Accountant’s Compilation Report: Similar to the requirements in the review engagement literature, when supplementary information accompanies financial statements and the accountant’s compilation report thereon, AR-C 80.34 requires that the accountant clearly indicate the degree of responsibility, if any, the accountant is taking with respect to such information in either a separate paragraph in the accountant’s compilation report on the financial statements or a separate report on the supplementary information. AR-C 80.35 and 80.36 highlight the changes made to the language of the separate paragraph in the accountant’s compilation report on the financial statements or the separate report on the supplementary information.

  • Compilation Engagements: Reporting Known Departures from the Applicable Financial Reporting Framework: SSARS No. 23 amended the guidance in AR-C 80 related to reporting known departures from the applicable financial reporting framework (for example, a U.S. GAAP departure). These amendments, effective upon the issuance of SSARS 23 are presented in SSARS No. 23 AR-C 80.29 and AR-C 80.30.
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