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Changes are coming to compilations and reviews
The American Institute of CPAs' Accounting and Review Services Committee made the most significant changes to compilation and review engagements in over 30 years with the Issuance of Statement on Standards for Accounting and Review Services No. 19, Compilation and Review Engagements.
The new guidance is separated into three sections:
* A framework for performing and reporting on compilation and review engagements;
* Standards and guidance on compilations of financial statements; and,
* Standards and guidance on reviews of financial statements.
The guidance for compilation and review engagements has been separated, review performance procedures have been clarified, documentation requirements for compilation engagements have been enhanced, and the reports for compilations and reviews have been changed. These updates will take effect for periods ending on or after Dec. 15, 2010.
THE FRAMEWORK
SSARS No. 19 provides a framework that defines and describes the objectives and elements of compilation and review engagements. When performing a compilation engagement, the CPA is not required to obtain evidence about the accuracy or completeness of the financial statements; as a result, no assurance on the statements is...