Review of Proposed Association and
Compilation SSARSs with 2012/2013
ARSC
November 13-15, 2012
Compilations and Nonattest Services
ARSC reliability project started in 2009 to make internal control
and financial statement preparation work easier for
practitioners
PEEC voted to amend 101-3 to withdraw a requirement that
impairs independence if a CPA designs or maintains internal
controls for an attest client
With this barrier and confusion removed, PEEC exposed for
public comment proposed new standards to clarify that
preparation of financial statements, in whole or in part, is a non
attest service
• Comments are due on November 30, 2012
American Institute of CPAs
Attest versus Non Attest Services
Today’s compilation standard applies when the CPA
is engaged to perform a compilation or where the
practitioner submits financial statements to their
client.
Submission means prepare and present
Because PEEC will define preparation as a non
attest service, compilation, review and auditing
standards all need to be revised to state that
preparation or drafting is not part of the attest
service, but rather a non attest service.
American Institute of CPAs
Compilation and Nonattest Services
With PEEC’s proposed change, ARSC proposed to
remove submission from the applicability section
since preparation would no longer be part of the
compilation (attest) service. Essentially no other
changes being made
This amendment would take nothing away from the
CPA to do what they do today for a client today. It
would merely clarify for them when they needed to
follow the compilation standard.
American Institute of CPAs
Compilation and Non Attest Service
CPAs who prepare financial statements but are not
engaged to perform a compilation (or review or
audit) engagement, would be required to request of
management that the financial statements contain a
legend or notation that makes clear that the financial
statements were not audited, reviewed, or compiled.
The CPA could always attach a disclaimer or
compilation report to the financial statements.
American Institute of CPAs
Proposed Effective Date
The proposed Compilation SSARSs would be effective
for compilations of financial statements for periods
ending on or after December 15, 2014. Early
implementation is required if the accountant early
implements the revised 101-3; otherwise, early
implementation is not permitted.
American Institute of CPAs
Where are the issues?
Many members incorrectly believe that attest
engagement is the same as an assurance
engagement, so many members don’t understand
why a compilation is an attest service today
• Attest engagement. An attest engagement is an engagement
that requires independence as defined in AICPA Professional
Standards.
Many members (and clients) believe that compile
and prepare are the same thing. So they don’t
understand the nuance between attest and non
attest
Some members have expressed concern regarding
the public interest when the CPA prepares financial
statements but has not reported
American Institute of CPAs
ARSC Thought Process
Can’t compel a member to perform an attest
engagement when they’ve been hired to perform a
non attest service
Practice issues around submission are very
prevalent today due to cloud application and other
electronic platforms
• No one knows any longer when submission occurs so member
is placed at risk for following a standard when it isn’t clear when
the standard applies
Public interest is served by having clarity around
applicability and not confusing users regarding CPA
association
American Institute of CPAs
Questions?
American Institute of CPAs