A1 SSARS Engagements Flashcards
SSARS Engagements
Statements on Standards for Accounting & Review Services (SSARS) apply when an accountant prepares, complies, or reviews financial statements. Applicable for accounting not audits.
All SSARS engagements require a written agreement (engagement letter) that highlights the terms.
Compilation Engagements
SSARS standards are applicable for a compilation of a nonissuer. A compilation of FS in accordance with SSARS presents information that is the representation of mgmt in the form of FS.
Accountant & Review Services Committee
The Accountant & Review Services Committee (of the AICPA) An authoritative body designated to promote/promulgate standards concerning an account’s association with unaudited financials of a nonissuer.
Auditing Standards Board
The ASB is responsible for auditing standards under GAAS.
General Accounting Office
The general accounting office is responsible for audit standards under the federal “Single Audit” act.
Financial Accounting Standards Board
FASB is responsible for GAAP standards.
Types of Engagements
CPA’s can perform 3 levels of services with respect to unaudited FS of a nonissuer. These include Preparation, Compilation, & Review engagements. These are services required by vendors, local banks etc.
Preparation Engagements
No assurance & no independence required. Prepare FS in accordance with a special reporting framework. May include multiple meetings & communications with the client regarding incomplete FS, adjustments, etc.
Compilation Engagements
No assurance required but independence is, or disclosure if there is a lack of. This engagement allows auditors to present info in the form of FS that is the representation of mgmt. A report is also required for compilation.
Review Engagements
Limited Assurance & independence is required. These engagements may be required when the clients bank needs assurance about their financial stability but are not willing to pay for an actual audit. Reviews are considered both an assurance & attestation engagement & an independence requirements. Also requires a report.
Review Engagement Requirements
Inquiries are conducted with internal personnel (mgmt, legal team, etc.) Confirmations aren’t required. Analytical procedures are anticipated and involves comparison of analytics results to the CPA’s expectation.
When More than One Service is Performed
For instance a compilation & audit, the auditor should generally issue the report that is appropriate for the highest level of service rendered.
Attest
Attest, Report, Compilation & Review
Nonattest
No report, Praparation
Assurance(opinion)
Reasonable Assurance
