Proposed omnibus SSARS
FINANCIAL REPORTING INSIGHTS |
The AICPA Accounting and Review Services Committee recently issued a proposed Statement on Standards for Accounting and Review Services (SSARS), Omnibus Statement on Standards for Accounting and Review Services – 2018. If finalized, the proposed SSARS would result in the following revisions, among others:
- The addition of requirements for (a) the accountant to specifically perform procedures (primarily inquiry) related to management’s going concern assessment, and (b) an emphasis-of-matter paragraph with respect to a going concern uncertainty in a review report in certain circumstances. The proposed SSARS also would require 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 will:
- Preclude the accountant from referencing, in the review report, the review or audit report of other accountants if that report includes an alert that restricts the use of such report
- Provide guidance when the accountant decides to make reference, in the review report, to the review or audit report of other accountants of financial statements of a significant component and the other accountant’s review or audit is performed in accordance with standards other than SSARS or auditing standards generally accepted in the United States of America
- Require the accountant of the reporting entity to communicate with the other accountants and ascertain that the other accountants are independent and understand the relevant ethical requirements
- Provide review reporting requirements and guidance when the accountant decides to make reference to the review or audit of other accountants who review or audit the financial statements of a significant component that are prepared using a different financial reporting framework from that used for the financial statements of the reporting entity
- The withdrawal of Interpretation No. 1, “Considerations Related to Reviews Performed in Accordance With International Standard on Review Engagements (ISRE) 2400 (Revised),” to AR-C section 90 and issuance of new AR-C section 100, International Reporting Issues, which would provide supplemental requirements and guidance for applying AR-C sections 80 and 90 when:
- The accountant is engaged to perform a compilation or review of financial statements prepared in accordance with a financial reporting framework generally accepted in another country not adopted by a body designated by the AICPA Council to establish generally accepted accounting principles; or
- A 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 will be effective upon issuance, the proposed SSARS are expected to be effective for compilations and reviews of financial statements for periods ending on or after June 15, 2019. The proposed SSARS is available for comment until December 14, 2017.