Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

SSARS 19 Compilation reports for NPOs

with 5 comments

Compilation reports will change starting December 31, 2010.  Some sample reports follow.

Update – SSARS 19 had been replaced by SSARS 21. All the reports have been revised. See:

  (Transition is actually December 15, but I doubt anyone reading this blog has clients with those types of year-end cutoffs.)  I have prepared the standard reports I will be using after the first of the year for my non-profit clients.  They are listed below.  Included are a single year and two-year comparative report.  Please feel free to copy and modify based on your firm’s policies.

SSARS 19 makes many other changes for compilations and reviews.  Would be good to do some studying before the end of the year.  I have blocked out the new review report here.

Single year report:

Accountant’s Compilation Report

Board of Directors

Orgname

Citystate

Dear Board of Directors:  (see reason for change on 11-19-11 at this post)

I (We) have compiled the accompanying statement of financial position of Orgname as of December 31, 2010, and the related statements of activity and cash flows for the year then ended.  I (We) have not audited or reviewed the accompanying financial statements and, accordingly, do not express an opinion or provide any assurance about whether the financial statements are in accordance with U.S. generally accepted accounting principles.

Management is responsible for the preparation and fair presentation of the financial statements in accordance with U.S. generally accepted accounting principles and for designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of the financial statements.

My (Our) responsibility is to conduct the compilation in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants.  The objective of a compilation is to assist management in presenting financial information in the form of financial statements without undertaking to obtain or provide any assurance that there are no material modifications that should be made to the financial statements.

monthday, 2011

Comments:

  1. Above example has been modified for a nonprofit organization.
  2. Delete the singular or plural pronouns (I/We) depending on whether you are a single partner or multi-partner firm.
  3. Original text contains “accounting principles generally accepted in the United States of America” instead of “U.S. generally accepted accounting principles”.  The SASs allow the use of US GAAP.  I believe that phrasing makes much more sense for my client base, so have changed the text to the GAAP format.  Your firm policy may be different, so revised it (in two different places!) as needed.
  4. Text that will change for each client is input with intentional misspelling (see orgname, citystate, monthday), so if you forget to change the data, a spell check will remind you.

Two year comparative compilation report for NPO:

(Update 2-2-11 – I got ahead of the professional literature when I wrote this post.  SSARS 19 does not actually address comparative financials when the prior year was reported upon with pre-SSARS 19 language.  The AICPA staff have issued a Q&A document addressing this. See this post.  The following wording fits that Q&A document quite well.)

Accountant’s Compilation Report

Board of Directors

Orgname

Citystate

Dear Board of Directors:  (see reason for change on 11-19-11 at this post)

I (We) have compiled the accompanying statements of financial positions of Orgname as of December 31, 2010 and 2009, and the related statements of activity and cash flows for the years then ended.  I (We) have not audited or reviewed the accompanying financial statements and, accordingly, do not express an opinion or provide any assurance about whether the financial statements are in accordance with U.S. generally accepted accounting principles.

Management is responsible for the preparation and fair presentation of the financial statements in accordance with U.S. generally accepted accounting principles and for designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of the financial statements.

My (Our) responsibility is to conduct the compilations in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants.  The objective of a compilation is to assist management in presenting financial information in the form of financial statements without undertaking to obtain or provide any assurance that there are no material modifications that should be made to the financial statements.

monthday, 2011

Same comments as for the single-year presentation.

Update:  I have written a 3-hour online CPE course called Compilation and Review: Practice Issues (Third Edition) available at the CCH Learning Center website. From the course description:

This course was prepared to enable participants who are experienced accountants to improve their knowledge of the issues affecting their compilation and review practices.

Course discussed in more detail at this post.

Written by Jim Ulvog

October 23, 2010, 9:14 am at 9:14 am

5 Responses

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  1. Is there any requirement to issue comparative financials when you have done the prior year’s compilation? In my case, we review year-end and compile at 6-mo. I would prefer to issue the report just for 6/30/11 w/o presenting 6/30/10, as more relevant comparison would be the year-end reviewed statements.

    Allison

    August 11, 2011, 10:58 am at 10:58 am

    • Good question. I’m not aware of anything that requires comparative financials. It is up to the client, with input from the CPA, to figure out what reporting makes sense.

      If I understand your question, you would like to present 6 month interim to prior year 12 month. That makes sense. Seems that would be quite helpful. If current 6 month income statement to prior year 6 month would be helpful, do that instead or in addition.

      Might wind up with oddly phrased accountant’s report, but that is fine.

      Jim Ulvog

      August 11, 2011, 23:32 pm at 11:32 pm

  2. […] and review report say.  See thumbnail picture of the reports here.  See sample reports here and […]

  3. […] SSARS 19 Compilation reports for NPOs […]

  4. […] CPAs who haven’t caught on to this. If you don’t know what SSARS 19 refers to or what that new three paragraph report looks like, you really need to do some […]


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