United States

New selected procedures engagement proposed

FINANCIAL REPORTING INSIGHTS  | 

The American Institute of Certified Public Accountants recently issued a proposed Statement on Standards for Attestation Engagements (SSAE), Selected Procedures, to expand a practitioner’s ability to perform procedures and report in a procedures-and-findings format beyond that currently provided by AT-C section 215, Agreed-Upon Procedures Engagements. The Exposure Draft proposes a new “selected procedures” engagement in which the practitioner may determine the procedures to be performed, and no party would be required to take responsibility for the sufficiency of the procedures. This allows the practitioner to perform the engagement in situations in which the specified parties may not have the ability or willingness to fully develop or determine the procedures, without having to perform a separate consulting services engagement. However, the proposed standard would require the engaging party to determine the intended purpose of the engagement (that is, the use for which the practitioner’s report is intended) and to provide a written acknowledgment regarding their awareness of the actual procedures performed.

Also, a selected procedures engagement would not require:

  • The practitioner to either request an assertion or disclose in the accountant’s report when a written assertion is not obtained. Although the proposed standard does not require a written assertion from the responsible party, it does require that the practitioner request certain written representations from the engaging party and, in situations in which the engaging party is not the responsible party, from the responsible party as well.
  • The practitioner to restrict the use of the report. However, the practitioner would not be precluded from restricting the use of the selected procedures report if the engaging party asks that the report be restricted or if the practitioner deems a restriction on the use of the selected procedures report to be appropriate.

If finalized, the proposed SSAE is anticipated to be effective for reports dated on or after May 1, 2019, and early implementation would be permitted. The Exposure Draft is available for comment until December 1, 2017.