Compilations & reviews

Primer on Compilation and Preparation engagements under SSARS #21

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Image courtesy of Amazon. Used for this review under Fair Use.
Image courtesy of Amazon. Used for this review under Fair Use.

Charles Hall has written a book describing a new service called ‘preparation’ and the changes for compilations from SSARS 21.

If you perform a few compilation engagements a year and have not started paying attention to the complete rewrite of comp and review rules, this is the book for you. The transition date is financial statements for years ending after December 15, 2015. Essentially this applies to all your 12/31/15 comp and review work.

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Multiple definitions of materiality are in play

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Image courtesy of DollarPhotoClub.com
Image courtesy of DollarPhotoClub.com

If you would like to compare the various definitions in play for materiality, then Emily Chasan has the article for you at the Wall Street Journal on 11/3:  Definition of Materiality Depends Who You Ask.

The definition readers of this blog have incorporated deep into their brain is from FASB, as follows:

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Frequently asked questions about SSARS 21

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For a limited time, the AICPA’s Center for Plain English Accounting is making three of their reports available for free. You can find them here.

Of particular note is SSARS No. 21: Frequently Asked Questions and Answers. There are 22 Q&A that can help you get oriented on a new way to do reviews, comps, and preparation engagements. Also provides good implementation ideas.

Might want to check it out quickly and archive a copy since there is no comment on how long these items will be made available on a complimentary basis.

Looks like the CPEA has some good resources. Seems like a good idea to have their voice inside the AICPA world. However, at an annual membership cost of $795 for a firm with five or less professionals, I won’t be joining anytime soon.

Fellow CPAs, we need to step up our audit game

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Today I listened to the rebroadcast of 2015 Peer Review Update. Check out the class if you have the chance.

Update 7/7: The next rebroadcast will be July 20, 2015. Link is here. If that link has expired or disappeared, this page has a long list of all upcoming events in peer review.

Heard several few things that distressed me.

In particular, we CPAs collectively need to improve the quality of the work we are doing in the audit arena.

Consider a few points. This is what I heard from the presentation. I haven’t gone back to source documents to verify the numbers or explanations. This is what I heard and jotted down in my notes while listening to the session.

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Price cut on print books

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I’ve dropped the prices for the print copies of my books available at Amazon, Barnes & Noble, and iTunes store.

Here is what you can find on-line:

tragedy-cover

 Tragedy of Fraud – Insider Trading Edition

Story of Scott London’s fall from regional audit partner at KPMG to prison inmate because of his insider trading.

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More good stuff for auditors – 1/9

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A few articles for your growth. Comp and Review reports under SSARS 21 and 19. Bake-your-own net income measures. Lunch money thief gets 5 years in prison and $1.8M restitution

1/7 – CPA-Scribo – SSARS 21 Reports – Preparation, Compilation, and Review – Charles Hall has a great post providing sample reports under SSARS 21. Gives the reports under SSARS 19 for contrast. You gotta’ check it out.

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CPE courses on SSARS 21 in development

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I’m in the process of writing and rewriting a series of CPE courses on compilations, reviews, and preparation services. These courses will describe the changes made from SSARS #21, which is a major rewrite of the comp and review rules. 

These courses will be a major overhaul of what I wrote three years ago for CCH.

Stay tuned for more info as the courses become available.

Here’s the courses on SSARS 19 I wrote or updated:  …

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Effective date of SSARS #21 and ideas on how to use the early implementation option

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The effective date of each section of SSARS #21 is for financial statements for periods ending on or after December 15, 2015.

On a practical basis, for most accountants that means your clients with fiscal years ending December 31, 2015 will be the first set of reports for which you must apply SSARS 21. I have to simplify effective dates to keep them straight, so here goes:  SSARS 21 applies for 12/31/15 balance sheets.

That means you will need to apply SSARS 21 for work performed in early 2016 on 12/31/15 financials.

Early implementation allowed

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Sample compilation report under SSARS 21

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Update: If you are checking out the requirements for compilation reports, you might benefit from buying a Primer on Compilation and Preparation engagements under SSARS #21. Book is written by my friend, Charles Hall, CPA. For Wednesday 12/2 the price is a mere $0.99.

Here is the new compilation report that will be used when SSARS 21 goes into effect.

I will provide three examples. First, the illustrative standard report. Second, modification of the standard report for a sole practitioner. Third, modification for a non-profit organization.

Copy and paste at your own risk.

Illustrative standard report …

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