Statement of the future.

• Author: Allmon, Michael B.

the new Statement on Standards for Accounting and Review No. 21 (SSARS 21) clarifies and revises the existing standards for reviews. compilations and engagements by accountants in public practice who prepare financial statements for clients.

The AICPA, as part of its initiative to make standards easier to read. understand and apply, began issuing clarified standards in 2011 (Statement on Auditing Standards Nos 122-124). This new statement presents general principles intended to help accountants better understand professional responsibilities when performing engagements in accordance with SSARS, introduces a new financial statement preparation service (called "preparations") and makes significant changes to compilation and review engagements.

These new standards have a SSARS designation to differentiate them from standards designated "AR." This statement has an effective date for engagements performed, engagements to prepare financial statements, compilations for financial statements and reviews of financial statements for periods ending on or after Dec. 15, 2015. Early implementation is permitted. SSARS 21 supersedes all of the existing AR sections other than AR 120, Compilation if Pro Anita Financial Information, which will be addressed by ARSC.

SSARS No. 21 has lour sections: Sec. 60, General Principles for Engagements Performed in Accordance with Statements on Standards for Accounting and Review Services; Sec. 70, Preparation of Financial Statements; Sec. 80, Compilation Engagements: Sec. 90, Review of Financial Statements.

General Principles: SSARS 21, Sec.

60 SSARS 21 Sec. 60 provides general principles [Or engagements performed in accordance with SSAR.S 21. It's intended to help accountants better understand their professional responsibilities when performing engagements to prepare financial statements, compilations or reviews. Along with an explanation of its application and other explanatory materials, there are six requirements:

1. Financial statements: The financial statements subject to the engagement performed in accordance with SSARSs are those of the entity The preparation and fair presentation of such financial statements requires identification of the applicable framework. preparation of the financial statements in accordance with that framework and inclusion of an adequate description of that framework in the financial statements. The framework can be a general-purpose framework or a special-purpose lnunework, depending on the needs of the users.

2. Ethical requirements: The accountant should comply with relevant ethical responsibilities relating to engagements performed in accordance with SSARSs. as well as the AlCPA Code of Professional Conduct, the rules of state hoards of accountancy zinc' tither regulatory bodies.

3. Professional judgment: The accountant is expected to have the training, knowledge and experience to develop the necessary competencies to make professional judgment in an engagement.

4. Conduct of the engagement in accordance with SSARS: The requirement includes complying with SSARS sections relevant to the engagement; complying with relevant requirements; defining professional responsibilities; and other preparation, compilation and review publications.

5. Engagement level quality control: Engagement learns are responsible for implementing...