Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Sample compilation report under SSARS 21

with 3 comments

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

Management is responsible for the accompanying financial statements of XYZ Company, which comprise the balance sheets as of December 31, 20X2 and 20X1 and the related statements of income, changes in stockholders’ equity, and cash flows for the years then ended, and the related notes to the financial statements in accordance with accounting principles generally accepted in the United States of America. I (We) have performed compilation engagements in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. I (We) did not audit or review the financial statements nor was (were) I (we) required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, I (we) do not express an opinion, a conclusion, nor provide any form of assurance on these financial statements.

[Signature of accounting firm or accountant, as appropriate]

[Accountant’s city and state]

[Date of the accountant’s report]

A few quick observations

AR80.17 does not discuss a salutation.

Notice there are no section headings. It’s all one paragraph.

Caution: comments in the next two paragraphs are based on my first glance at the literature. Please confirm for yourself.

AR80.A19 says the accountant *may* request management to place a comment such as “See Accountant’s Compilation Report” on each page of the financial statements. Notice that paragraph does not use either “should” or “must”. Repeating myself, that comment is in the Application and Other Explanatory Matter section.

I believe it would be unwise to drop that comment on a compiled financial statement, but if an accountant wants to argue that is doesn’t have to be included because the literature doesn’t require it, no one can argue the point. Hint: your peer reviewer may not criticize you for not doing something that is not required. Putting the comment on each page is now in the category of best practice.

AR80.A21 says the city and state can be on the letterhead.

 Standard report modified for a sole practitioner

I will modify the illustrative report for a sole practitioner. Also modified for single year presentation.

Management is responsible for the accompanying financial statements of XYZ Company, which comprise the balance sheet as of December 31, 20X2 and the related statements of income, changes in stockholders’ equity, and cash flows for the year then ended, and the related notes to the financial statements in accordance with accounting principles generally accepted in the United States of America. I have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. I did not audit or review the financial statements nor was I required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, I do not express an opinion, a conclusion, nor provide any form of assurance on these financial statements.

[Signature of accountant]

[Accountant’s city and state]

[Date of the accountant’s report]

Standard report modified for an NPO and reference to US GAAP instead of APGA in USA

AR80.17 does not identify country of origin as a presumptively mandatory requirement. Financial reporting framework is discussed in the definition section of AR80.

Here is a sample report with a few more modifications:

[Letterhead with Accountant’s city and state]

Management is responsible for the accompanying financial statements of XYZ Charity, which comprise the statements of financial position as of December 31, 20X2 and 20X1 and the related statements of activity and cash flows for the years then ended, and the related notes to the financial statements in accordance with U.S. generally accepted accounting principles. I have performed compilation engagements in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. I did not audit or review the financial statements nor was I required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, I do not express an opinion, a conclusion, nor provide any form of assurance on these financial statements.

[Signature of accountant]

[Date of the accountant’s report]

Please dive into SSARS 21 for yourself. I think you will like it. A lot.

Update – See also:

Written by Jim Ulvog

October 28, 2014, 7:10 am at 7:10 am

3 Responses

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  1. […] Visually this looks somewhat similar to an audit report. It is visually very different from the new compilation report. […]


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