New fraud guidance: communication is the name of the game where fraud is suspected.
Journal of Accountancy › Vol. 201 Nbr. 1, January 2006
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New fraud guidance: communication is the name of the game where fraud is suspected.
A new statement on standards for accounting and review services (SSARS) makes specific chances regarding an accountant's consideration of fraud and illegal acts in compilation and review engagements. The AICPA Accounting and Review Services Committee (ARSC) amended SSARS no. 1, Compilation and Review of Financial Statements by issuing SSARS no. 12, Omnibus Statement on Standards for Accounting and Review Services--2005. This article covers SSARS no. 12's changes, which are generally effective for compilations and reviews of financial statements for periods ending after December 15, 2005.
SSARS no. 12 does not change the objectives in such engagements. You need not report illegal acts that are clearly inconsequential and may reach agreement in advance with the entity regarding the nature of such items to be communicated. The statement doesn't require you as the CPA to assess the risk of fraud or to plan a compilation or review engagement specifically to dis...See the full content of this document
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