United States

Omnibus SSARS issued

FINANCIAL REPORTING INSIGHTS  | 

The AICPA Accounting and Review Services Committee recently issued Statement on Standards for Accounting and Review Services (SSARS) 24, Omnibus Statement on Standards for Accounting and Review Services – 2018, which includes the following revisions, among others:

  • The addition of requirements for (a) the accountant to specifically perform procedures related to management’s going concern assessment, (b) an emphasis-of-matter paragraph in a review report if, after considering conditions or events and management’s plans, the accountant concludes that substantial doubt about the entity’s ability to continue as a going concern for a reasonable time remains and (c) a specific written representation regarding disclosure of all information relevant to the use of the going concern assumption in the financial statements.
  • The issuance of amendments to the “Reference to the Work of Other Accountants in an Accountant’s Review Report” section of AR-C section 90 that:
    • Preclude the accountant from referencing, in the review report, the review or audit report of other accountants if the other accountant’s report includes an alert that restricts the use of such report.
    • Require the accountant of the reporting entity to communicate with the other accountants and determine whether the other accountants understand the relevant ethical requirements and, in particular, are independent.
    • Preclude the accountant, if the component’s financial statements are prepared using a financial reporting framework different from that used for the financial statements of the reporting entity, from referencing the review or audit of the other accountants in the review report of the accountant of the reporting entity unless the following apply:
      • The accountant has determined that the measurement, recognition, presentation and disclosure criteria that are applicable to all material items in the component’s financial statements in accordance with the financial reporting framework used by the component are similar to the criteria that are applicable to all material items in the reporting entity’s financial statements in accordance with the financial reporting framework used by the reporting entity.
      • The accountant of the reporting entity has obtained sufficient appropriate review evidence for purposes of evaluating the appropriateness of the adjustments to convert the component’s financial statements to the financial reporting framework used by the reporting entity without the need to assume responsibility for, and thus be involved in, the work of the other accountants.
  • Issuance of new AR-C section 100, Special Considerations — International Reporting Issues, which provides requirements and guidance when an accountant is engaged to perform a compilation or review and either (a) the financial statements have been prepared in accordance with a financial reporting framework generally accepted in another country, or (b) the compilation or review is to be performed in accordance with both SSARS and another set of compilation or review standards.

Except for a technical correction that was effective upon issuance, SSARS 24 is effective for compilations and reviews of financial statements for periods ending on or after June 15, 2019.