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Revisions to SSARS issued


The AICPA Accounting and Review Services Committee recently issued Statement on Standards for Accounting and Review Services (SSARS) 25, Materiality in a Review of Financial Statements and Adverse Conclusions, which includes the following revisions, among several others:

  • The revision of the definitions of the following terms in AR-C section 60 so as to be consistent with the definitions in Statements on Auditing Standards: financial statements, designated accounting standard-setter, general purpose financial statements, general purpose framework, special purpose financial statements and special purpose framework
  • The addition of a requirement for the accountant to inform management of the reasons for withdrawal from a preparation engagement
  • The addition of the definition of limited assurance in AR-C section 90 as follows: “A level of assurance that is less than the reasonable assurance obtained in an audit engagement but is at an acceptable level as the basis for the conclusion expressed in the accountant’s review report.”
  • The addition of an explicit requirement in AR-C section 90 for the accountant to determine materiality for the financial statements as a whole and to apply this materiality in designing the procedures and evaluating the results obtained from those procedures
  • An addition to AR-C section 90 that if the accountant determines, or is otherwise aware, that the financial statements are materially misstated, the accountant should express one of the following:
    • A qualified conclusion, when the accountant concludes that the effects of the matter or matters giving rise to the modification are material but not pervasive to the financial statements
    • An adverse conclusion, when the effects of the matter or matters giving rise to the modification are both material and pervasive to the financial statements.

The amendments are effective for engagements performed in accordance with SSARS for periods ending on or after December 15, 2021.

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