Regardless of the services provided in a SSARS engagement (preparation, compilation, or review service) what should the accountant expect?
That management will meet its responsibilities. Which includes providing unrestricted access to the information needed.
SSARS applies to
non-issuers only
SSARS may be applied to other historical or prospective financial information if they are
Adapted as necessary in the circumstances for services on other historical or prospective financial information.
Who is responsible for selecting the Financial reporting framework in a SSARS engagement?
Management.
What is the accountant responsible for in a SSARS engagement ?
- The accountant is responsible for determining whether the framework is acceptable, and
- Selecting procedures used in the engagement
In a preparation service, management’s omission of substantially all disclosures ordinarily included in the financial statements should be disclosed where?
On the face of the financial statements.
A notation that management has elected to omit substantially all disclosures should be placed on the face of Financial Statements
What should the accountant obtain to compile financial statements of a non-issuer in accordance with SSARS?
The accountant should obtain an understanding of:
- The applicable financial reporting framework.
- The significant accountant policies adopted by management.
What should an accountant do if he/she believes that modifications of a compilation report is not adequate to indicate the deficiencies?
Withdraw from the engagement.
What is the objective of a compilation?
To apply accounting and financial reporting expertise to assist management in the presentation of financial statements without undertaking to obtain or provide any assurance on them.
The compilation cannot be relied on to disclose errors, fraud, or illegal acts.
An accountant should not compile unaudited financial statements of a non-issuer to the client or others unless,
As a minimum he/she complies with the standards set forth in AR-C80 applicable to compilation engagements.
Is independence required by SSARS for compilation?
No it is not, but lack of independence should be disclosed in the compilation report.
If an accountant is asked to change the engagement from an audit to a review, the request may result from?
- A change in circumstances affecting the entity’s requirements.
- A misunderstanding as to the nature of one of the services; or
- A scope restriction, whether imposed by the client or circumstance.
Before the accountant engaged in a higher level of service agrees to a request to change the engagement from an audit to a review, what should be considered?
- The reason for the clients request, in particular the implications of a scope restrictions whether imposed by client or circumstance.
- The additional effort required to complete the original engagement.
- The estimated additional cost to complete the original engagement.
What are some of the things that should NOT be mentioned in a report on a changed engagement?
- The original engagement should not be mentioned.
- any auditing or review procedures performed.
- The scope limitation that led to the changed engagement.
What does a review primarily consist of?
making inquiries of management, applying analytical procedures, and obtaining a management representation letter.
According to financial statements reviewed by an accountant should be accompanied by
A report stating that a review is substantially less in scope than an audit.
SSARS include:
Preparation, review, and compilation.
What is preparation according to SSARS?
A service to prepare a clients financial statements without attaching a report or considering the accountants independence.
What is a compilation according to SSARS?
A service to assist management in presenting financial statements without providing any assurance.
The accountant reports on the statements, and determines whether he/she is independent.
What is a review according to SSARS?
A service to obtain limited assurance that no material modifications need to be made to the statements for them to be in accordance with the applicable reporting framework.
If during a review, the accountant becomes aware that information provided by management is incorrect, incomplete, misstated, or unsatisfactory…what should the accountant do?
- Request that management;
- Consider the affect on the financial statements,
- Communicate the results of the consideration to the accountant.
- Consider;
- The results, and
- whether they indicate that the statements may be materially misstated.
