Troubled engagement: SSARS 19 and its impact on peer reviews.

• Author: Powell, Jessie
• Position: Peerreview - Statement on Standards for Accounting and Review Services No.19

Though Statement on Standards for Accounting and Review. Services No.19 (SSARS 19) has been effective for financial statement engagements with year's ending on or alter Dec. 15, 2010, firms continue to have issues with their SSARS engagements primarily related to this standard. The following will focus on the issues found in engagement peer reviews, since these peer reviews are the most affected by SSARS 19.

Peer Reviews

Before we dive into SSARS 19, let's review the peer review process. Keep in mind that the peer review program is to confirm that firms, including sole practitioners, are following promulgated standards. The peer review program clues not set standards. Generally: (inns that perform any attest engagements.-be it compilations, reviews, audits or other w test engagements--must have a peer review. "Those that only perform compilations or reviews need an engagement peer review Those that only perform compilations, where no report is issued (SSARS 8). do not need a peer review because no report is issued. A firm can receive a "Pass," "Pass with Deficiency (ies)" or a "Fail" report.

The key to a successful peer review is to understand the requirements of SSARS 19 and understand the impact of the other standards that firms are subject to when performing compilation and review engagements. Since this article is discussed on practitioners that perform compilation and review engagements, I will only discuss the applicable standards:

* Statement on Quality Control Standards No. 8: Requires a firm to have quality control policies and procedures in place that cover the six elements of quality control:

- Leadership responsibilities Lou quality within the firm;

- Relevant ethical requirements:

- Acceptance and continuance of clients and engagements.,

- Human resources: and

- Engagement performance.

* AICPA Code of Professional Conduct including Interpretation 101-3 with regards to independence matters for compilation and review engagements.

* Financial Accounting Standards Board

* Statements on Standards for Accounting and Review Services (SSARS).

SSARS 19

SSARS 19 overhauled We standards for performing and reporting on compilation and review engagements.

In the past, compilation and review e engagements were often considered as part of another engagement such as tax preparation, bookkeeping or other nonattest services. However, compilations are attest engagements where the practitioner provides no assurance, and review engagements are...