presents presents Mastering SSARS No. 19 on Compilations and Reviews p Preparing for the New Engagement Framework and Emphasis on Practitioner Judgment A Live 110-Minute Teleconference/Webinar with Interactive Q&A A Li 110 Mi t T l f /W bi ith I t ti Q&A Today's panel features: Mike Glynn, Technical Manager, Audit and Attest Standards Team, AICPA, New York Kurt Oestriecher, CPA, Partner-In-Charge, Accounting and Auditing Services, Oestriecher & Company, CPA’s , Alexandria, La. , , g , g g , p y, , , Wednesday, June 2, 2010 The conference begins at: 1 pm Eastern 12 pm Central 11 am Mountain 10 am Pacific You can access the audio portion of the conference on the telephone or by using your computer's speakers. Please refer to the dial in/ log in instructions emailed to registrations.
For Continuing Education purposes, g please let us know how many people are listening at your location by g y y • closing the notification box • and typing in the chat box your • and typing in the chat box your company name and the number of attendees attendees. • Then click the blue icon beside the box to send to send. For live event only. For live event only.
• If the sound quality is not satisfactory • If the sound quality is not satisfactory and you are listening via your computer speakers please dial 1-888-450-9970 speakers, please dial 1 888 450 9970 and enter your PIN when prompted. Otherwise, please send us a chat or e- , p mail sound@straffordpub.com immediately so we can address the problem. • If you dialed in and have any difficulties during the call, press *0 for assistance.
Mastering SSARS No. 19 On Compilations And Reviews Webinar June 2, 2010 June 2, 2010 Mike Glynn, AICPA Kurt Oestriecher, Oestriecher & Co. kurt@oandcocpas.com mglynn@aicpa.org
Today’s Program Today s Program Review Of SSARS No. 19 Background, Terms Slides 6-31 ( Mike Glynn ) Drill-Down On Key Issues For Businesses Slides 32-49 ( Kurt Oestriecher ) Drill-Down On Key Issues For Practitioners Slides 50-53 ( Mike Glynn ) 5
Review Of SSARS No. 19 B Background, Terms k d T Mike Glynn, AICPA Mike Glynn, AICPA
Session Session Objective Objective • Discuss the changes to the compilation and review literature as a result of the issuance of SSARS 19, Compilation and Review Engagements in December 2009 2009 7
Compilation Compilation – – What It Is What It Is • A compilation is: – A service provided by an accountant – Objective is to assist management in presenting financial information in the form of financial statements statements – Accountant does not obtain or provide any assurance that there are no material modifications that should be made to the financial statements. 8
Compilation Compilation – – What It Is Not What It Is Not • A compilation is not an assurance engagement. – Does not contemplate: • Performing inquiries • Performing analytical review procedures • Obtaining an understanding of internal control • Assessing fraud risks • Testing accounting records T ti ti d 9
Review Review – – What It Is What It Is • A review is: – A limited assurance engagement • Accountant accumulates review evidence (primarily through analytical procedures and (primarily through analytical procedures and inquiries). 10
Review Review – – What It Is Not What It Is Not • A review is not: – An audit (high level of assurance engagement) • As such, does not contemplate: – Obtaining an understanding of internal control – Assessing fraud risk – Testing accounting records 11
SSARS 19 • Effective for comps and reviews of f/s ending on or after 12/15/10 – Early implementation permitted for new reporting E l i l i i d f i option for comps when independence is impaired • Replaces AR 20, 50 and 100 • Will be codified as AR 60, 80 and 90 12
SSARS 19 – Separating Compilation Guidance From Review Guidance Guidance From Review Guidance • In place of AR 20, 50 and 100, the SSARSs will include new sections: – AR 60, Framework for Performing and Reporting on Compilation and Review Engagements Compilation and Review Engagements – AR 80, Compilation of Financial Statements – AR 90, Review of Financial Statements – AR 90 Review of Financial Statements • AR sections 110 (Elements), 120 (Pro Forma), 200 (Comparatives), 300 (Prescribed Forms), 400 ( p ) ( ) (Successor/Predecessor Communications), and 600 (Personal Financial Statements) will be conformed. 13
SSARS 19 – Separating Compilation Guidance From Review Guidance (Cont.) Guidance From Review Guidance (Cont.) • Change made in response to member comments that literature was difficult to use • Members performing compilations can now just look at the compilation section without having to look at review the compilation section without having to look at review guidance 14
SSARS 19 – Clarification Of Review Performance Procedures Performance Procedures • Is intended as a clarification, and most accountants should see minimal impact on how they perform their engagements. • A review is not: A review is not: – An AUP engagement – Canned analytical procedures and inquiries – Canned analytical procedures and inquiries – A compilation plus a few extra procedures • A review is: A review is: – An assurance engagement • As such, has certain similarities to an audit , engagement 15
16
SSARS 19 – Clarification Of Review Performance Procedures (Cont ) Performance Procedures (Cont.) • A review requires the accumulation of review evidence that will provide the accountant with limited assurance that there are no material modifications that should be that there are no material modifications that should be made to the f/s. – In an audit, the auditor accumulates audit evidence In an audit, the auditor accumulates audit evidence in order to obtain reasonable assurance. • The accountant uses professional judgment to determine specific procedures. 17
SSARS 19 – Clarification Of Review Performance Procedures (Cont.) Performance Procedures (Cont ) • Review procedures are tailored based on the accountant’s: – Understanding of the industry – Knowledge of the client K l d f h li – Awareness of the risk that he or she may unknowingly fail to modify the accountant’s review unknowingly fail to modify the accountant s review report on f/s that are materially misstated • May include procedures other than analytical procedures and inquiries 18
SSARS 19 – Documenting The Understanding With Management Understanding With Management • Does not change the requirement to establish an understanding with management regarding the services to be performed services to be performed. – Previously, the SSARSs stated that it was preferable that the understanding be in writing. preferable that the understanding be in writing. – SSARS 19 requires that the understanding be documented in writing. • This may result in a change in practice for some accountants. 19
SSARS 19 – Documenting The Understanding With Management (Cont.) Understanding With Management (Cont.) • Leaves open the engagement that the written understanding should cover. – Can combine the monthly compilation engagements C bi h hl il i and annual review in one engagement letter – Engagement letters can cover multiple years – Engagement letters can cover multiple years • Is discouraged, since the understanding may lose clarity as time passes y p • Recommendation is that the understanding be documented at least annually 20
SSARS 19 – Enhanced Requirements For Compilation Documentation For Compilation Documentation • Previously, accountant was only required to document: – The understanding with management regarding services to be performed if in a SSARS 8 engagement engagement – Communications to management regarding suspected fraud or illegal acts p g 21
SSARS 19 – Enhanced Requirements For Compilation Documentation (Cont.) Compilation Documentation (Cont.) • Requirements are expanded – Understanding with management regarding services to be performed for all engagements b f d f ll – Any findings or issues that, in the accountant’s judgment are significant judgment, are significant – Communications regarding fraud and illegal acts 22
SSARS 19 – Review Documentation Changes Changes • New documentation requirements – The establishment of an understanding with management regarding the services to be performed performed – Management’s responses to inquiries involving fluctuations or relationships that are inconsistent fluctuations or relationships that are inconsistent with other information or differ significantly from expected amounts – Significant matters covered in the inquiry procedures and the responses received • Can be done via memorandum checklist or other • Can be done via memorandum, checklist or other means 23
SSARS 19 – Review Documentation Changes (Cont ) Changes (Cont.) – Any significant findings or issues • The results of procedures that indicate the f/s could be materially misstated • Actions taken to address such findings Actions taken to address such findings • The basis for final conclusions 24
Recommend
More recommend
