AICPA Issues SSARS No. 24
The AICPA’s Accounting and Review Services Committee (ARSC) has issued Statements on Standards for Accounting and Review Services (SSARSs) No. 24, Omnibus Statement on Standards for Accounting and Review Services – 2018. At their meeting in January 2018, the ARSC voted to approve the issuance of SSARS No. 24. However, the ARSC decided to delay the issuance of the new SSARS until late May in order to avoid the busy tax filing season for practitioners. SSARS No. 24:
- Creates a new AR-C section to address special considerations related to international reporting;
- Amends AR-C Section 60, General Principles for Engagements Performed in Accordance With Statements on Standards for Accounting and Review Services; and
- Revises AR-C Section 90 to introduce requirements for Going Concern considerations in a review engagement
Special Considerations—International Reporting
SSARS No. 24 adds new AR-C Section 100, Special Considerations—International Reporting Issues. AR-C Section 100 includes guidance and requirements for compilation or review engagements in the following circumstances:
- The financial statements have been prepared in accordance with a financial reporting framework generally accepted in another country not adopted by a body designated by the Council of the AICPA (Council) to establish generally accepted accounting principles; and
- The engagement is to be performed in accordance with SSARS and another set of compilation and review standards, such as (a) International Standard on Related Services (ISRS) 4410 (Revised), Compilation Engagements, or (b) International Standard on Review Engagements (ISRE) 2400 (Revised), Engagements to Review Historical Financial Statements.
SSARS No. 24 also includes application and other explanatory material, including guidance on reporting and illustrations of compilation and review reports on financial statements prepared in accordance with a financial reporting framework generally accepted in another country performed in accordance with SSARSs and another set of compilation or review standards.
Amendments to AR-C Sections 60
SSARS No. 24 also revises AR-C Section 60, General Principles for Engagements Performed in Accordance With Statements on Standards for Accounting and Review Services. The amendments to AR-C Section 60:
- Provide the definition for “fair presentation framework” and revises the definition of “financial reporting framework;” and
- Clarify that if the accountant accepts responsibility for the design, implementation, and maintenance of internal control, accepting such responsibility would impair the accountant’s independence. Therefore, if an accountant accepts such responsibility, the accountant would be precluded from performing a review of the financial statements.
Amendments to AR-C Section 90
The new SSARS also amends AR-C section 90, Review of Financial Statements, which addresses the accountant’s responsibilities when engaged to review financial statements. Under the amendments, AR-C Section 90, paragraph .39 conform the requirements on the contents of the accountant’s review report to the illustrative examples in exhibit C of AR-C section 90. Other amendments are also included in Section 90.
AR-C Section 100 and most of the other amendments are effective for compilations and reviews of financial statements for periods ending on or after June 15, 2019. The amendment to AR-C Section 90, paragraph .39, is effective upon issuance.
Also read A Closer Look-Going Concern
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