Thumbnail description of compilation and review reports

I listened to a webcast from Michael Glynn, CPA, Senior Technical Manager at the AICPA.  He touched on a number of post-implementation issues from SSARS 19.  His presentation is a variation of the article he wrote for the Cal Society magazine, which I discussed here and here. I will condense and expand on some of his points.

Thumbnail view of compilation report

Report is now 3 paragraphs instead of 2.

• First paragraph – introduction – Points out this report is neither an audit or review so there’s no assurance from the report.
• Second – management’s responsibility – Management is responsible for the report and internal control.
• Third – accountant’s responsibility and objective of compilation –  Interestingly, there is no conclusion or even any general comment on the financial statements.

Thumbnail view of review report

Report is now 4 paragraphs instead of 3.

• First – introduction – Basic approach is inquiry and analytical review. This is less than an audit, so there’s no opinion on the financial statements.
• Second – management’s responsibility – They are responsible for internal control and the financial statements.
• Third – accountant’s responsibility – Our job is to get limited assurance there are no material modifications needed to the financial statements.
• Fourth – conclusion – Accountant is not aware of any material modifications to the financial statements.