SSARS 19 is testable until December 2015. SSARS 21 is testable beginning July 1, 2015. SSARS 21 is included in V1.2 Topic 2: Preparation, Compilation, and Review Engagement . There is a lot of overlap
between SSARS 19 and SSARS 21. The below chart summarizes the significant differences between SSARS 19 and SSARS 21 that students should be aware of if testing in July - December 2015.
Note: If the audit exam has a question/simulation about one of the items where treatment is different under the standards (i.e. requirement that management sign the engagement letter), the
question/simulation most likely would reference the appropriate guidance (i.e. SSARS 19 or SSARS 21.)
Students studying with V1.1 should:
Replace V1.1 A2 Topic 2: Compilation and Review of Financial Statements with V1.2 A2 Topic 2: Preparation, Compilation, and Review of Financial Statements and
Print out "Summary of Differences between SSARS 19 and SSARS 21"
Students studying with V1.2 should:
Print out "Summary of Differences between SSARS 19 and SSARS 21".
Summary of Major Differences between SSARS 19 and SSARS 21
SSARS 19
SSARS 21
Introduction of Preparation Engagement (see pdf preparation topic, which is presented on pages numbered A2-28 through
A2-31)
New Engagement
When an accountant submits unaudited financial statements or is engaged to compile or review financial
statements.
Required to comply
with SSARS
Submission is defined as presenting to a client or third parties financial statements the accountant has
prepared.
When engaged to prepare, compile, or review historical financial statements
Summary of Major Differences between SSARS 19 and SSARS 21
SSARS 19
SSARS 21
Compilation Engagement:
Engagement letter
Engagement letter required and must be signed by the accountant or accountant's firm
Engagement letter required and must be signed by the accountant or accountant's firm AND management or those
charged with governance
Compilation Report
Compilation report required unless the financial statements are not expected to be used by a third party.
(If not expected to be used by a third party, use engagement letter instead of compilation report and ensure
each page of financial statements are clearly marked to restrict use.)
Compilation report required regardless of use of financial statements
ACCOUNTANT'S COMPILATION REPORT
I have compiled the accompanying balance sheet of XYZ Company as of December 31, 20XX, and the related
statements of income, retained earnings, and cash flows for the year then ended. I have not audited or
reviewed the accompanying financial statements and, accordingly, do not express an opinion or provide any
assurance about whether the financial statements are in accordance with [the applicable financial reporting
framework (for example, accounting principles generally accepted in the United States of America)].
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with [the applicable financial reporting framework] and for designing, implementing, and
maintaining internal control relevant to the preparation and fair presentation of the financial statements.
My responsibility is to conduct the compilation in accordance with Statements on Standards for Accounting
and Review Services issued by the American Institute of Certified Public Accountants. The objective of a
compilation is to assist management in presenting financial information in the form of financial statements
without undertaking to obtain or provide any assurance that there are no material modifications that should
be made to the financial statements.
[Signature of accounting firm or accountant]
[Date]
Management is responsible for the accompanying financial statements of XYZ Company, which comprise the balance
sheets as of December 31, 20X2 and 20X1 and the related statements of income, changes in stockholders’ equity, and cash
flows for the years then ended, and the related notes to the financial statements in accordance with accounting principles
generally accepted in the United States of America. We have performed compilation engagements in accordance with
Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services
Committee of the AICPA. We did not audit or review the financial statements nor were we required to perform any
procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not
express an opinion, a conclusion, nor provide any form of assurance on these financial statements.
[Signature of accounting firm or accountant]
[Accountant’s city and state]
[Date]
Wording of Report
Summary of changes to
report from SSARS 19 There is no title and the accountant's city and state must be included. The standard compilation report is shorter and contained within just one paragraph. (However, similar to SSARS 19, SSARS 21 requires additional paragraphs when
to SSARS 21
financial statements are prepared in accordance with a special purpose framework, if the entity elects to omit substantially all disclosures, or when the accountant is not independent.)
Summary of Major Differences between SSARS 19 and SSARS 21
SSARS 19
SSARS 21
Review Engagement:
Engagement letter
Engagement letter required and must be signed by the accountant or accountant's firm
Engagement letter required and must be signed by the accountant or accountant's firm AND management or those
charged with governance
INDEPENDENT ACCOUNTANT'S REVIEW REPORT
INDEPENDENT ACCOUNTANT'S REVIEW REPORT
[Appropriate Addressee]
[Appropriate Addressee]
We have reviewed the accompanying balance sheet of XYZ Company as of December 31, 20XX, and the
related statements of income, retained earnings, and cash flows for the year then ended. A review includes
primarily applying analytical procedures to management's financial data and making inquiries of company
management. A review is substantially less in scope than an audit, the objective of which is the expression of
an opinion regarding the financial statements as a whole. Accordingly, we do not express such an opinion.
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with [the applicable financial reporting framework (for example, accounting principles generally
accepted in the United States of America)] and for designing, implementing, and maintaining internal control
relevant to the preparation and fair presentation of the financial statements.
Our responsibility is to conduct the review in accordance with Statements on Standards for Accounting and
Review Services issued by the American Institute of Certified Public Accountants. Those standards require us
to perform procedures to obtain limited assurance that there are no material modifications that should be
made to the financial statements. We believe that the results of our procedures provide a reasonable basis
for our report.
Wording of Report
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be in conformity with [the applicable
financial reporting framework].
[Signature of accounting firm or accountant]
[Date]
We have reviewed the accompanying balance sheet of XYZ Company as of December 31, 20XX, and the related statements
of income, retained earnings, and cash flows for the year then ended. A review includes primarily applying analytical
procedures to management's financial data and making inquiries of company management. A review is substantially less
in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole.
Accordingly, we do not express such an opinion.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with [the
applicable financial reporting framework (for example, accounting principles generally accepted in the United States of
America)]; and this includes the design, implementation, and maintenance internal control relevant to the preparation and
fair presentation of the financial statements that are free from material misstatement whether due to fraud or error.
Accountant’s Responsibility
Our responsibility is to conduct the review in accordance with Statements on Standards for Accounting and Review
Services promulgated by the Accounting and Review Services Committee of the AICPA. Those standards require us to
perform procedures to obtain limited assurance as a basis for reporting whether we are aware of material modifications
that should be made to the financial statements for them to be in accordance with accounting principles generally
accepted in the United States of America. We believe that the results of our procedures provide a reasonable basis for our
report.
Accountant’s Conclusion
Based on our review, we are not aware of any material modifications that should be made to the accompanying financial
statements in order for them to be in accordance with [the applicable financial reporting framework].
[Signature of accounting firm or accountant]
[Accountant’s city and state]
[Date]
Summary of changes to
report from SSARS 19
to SSARS 21
Minor word changes (see underlined items under SSARS 21.) Addition of titles to the SSARS 21 report and required to include the accountant's city and state.