SSARS Flashcards
SSARS - Preparation
What is it?
The accountant takes the info from mgmt and prepares the f/s. A preparation is a nonattest service.
SSARS - Preparation
Independence
The auditor does not have to be independent
SSARS - Preparation
letter
There should be an engagement letter that outlines mgmt’s responsibilities & the acct’s responsibilities.
SSARS - Preparation
F/S
Each page of the f/s should include a statement that no assurance is provided.
SSARS - Compilation
What is it?
Assisting mgmt to draft the f/s w/o providing and level of assurance. It is an attestation engagement but NOT an assurance engagement. Also, a compilation can be performed for prospective or pro-forma information in addition to historical f/s.
SSARS - Compilation
Independence
Does not have to be independent since no assurance is provided, but the auditor should disclose this fact in the compilation report if they are not.
SSARS - Compilation
Report
It’s one paragraph. It states the accountant performed the compilation in accordance w/SSARS issued by the ARSC of the AICPA. It also states that the f/s have not been audited, and that the acct has compiled the f/s and is not issuing an opinion or conclusion nor providing any assurance on the f/s.
SSARS - Compilation
Procedures
NO procedures are performed on the data in a compilation. The auditor is expected to understand the client & the client’s industry, but no audit procedures of any kind are performed since no assurance is provided.
SSARS - Review
What is it?
An attest engagement that provides limited assurance that there are no material modifications that sb made to the f/s.
The auditor must be independent.
The auditor expresses a conclusion on a review engagement instead of an opinion.
SSARS - Review
Basics
- Posses knowledge of client’s industry
- determine materiality for the f/s as a whole, and design & perform procedures to address all material items.
- Apply analytical procedures
- Perform inquiries of mgmt
- Obtain a rep letter
SSARS - Review
reference on f/s
Each page of the f/s that have been reviews should be marked see accountant’s review report
SSARS - Review
I/C
The accountant is not required to obtain an understanding of IC
SSARS - Review
conclusions
Unmodified - clean conclusion & is expressed as I am not aware of any material modifications that should be made to the accompanying f/s in order for them to be in accordance w/GAAP.
Modified -
Qualified - misstatement is material but not pervasive
Adverse - both misstatement is material and pervasive
SSARS - Review
scope
include a statement in the report that a review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the f/s as a whole and that the accountant does not express such an opinion.
