Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Dividing line between bookkeeping and preparation services

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Is this bookkeeping or preparation of financial statements? Image courtesy of DollarPhotoClub.com

Is this bookkeeping or preparation of financial statements? Image courtesy of DollarPhotoClub.com

SSARS #21 explicitly defines bookkeeping as being outside the scope of the SSARS literature. The question becomes what is bookkeeping and what is a preparation engagement.

The AICPA has an article that can help highlight the dividing line: Bookkeeping or preparation service? That is the question.

Article suggests three ways to look at a service to help a CPA figure out whether Section 70 of SSARS #21 applies. If you are wondering, please check out the full article.

To make a solid decision, you need to read section 70 for yourself. Make sure you look at appendix A found in paragraph 70.A19 which provides a number of examples of when section 70 does or does not apply.

The last illustration in the exhibit provides the following contrast.

Section 70 does not apply when the accountant is

Entering general ledger transactions or processing payments (general bookkeeping) in an accounting software system

In contrast, section 70 does apply when the accountant is

Using the information in a general ledger to prepare financial statements outside of an accounting software system.

Hat tip to Charles Hall and for pointing out the article.

Written by Jim Ulvog

January 18, 2016, 7:19 am at 7:19 am

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