Posts Tagged ‘preparation of financials’
New CPE requirement in California for CPAs who only perform preparation engagements
Image courtesy of dollarphotoclub before merger with Adobe Stock.
Big news from CBA if the highest level of service you provide clients is a preparation engagement.
First, if you don’t perform compilations, reviews, audits, or other services covered by peer review, you don’t need to get a peer review.
Second, there is a specific CPE requirement: 4 hours in fraud education and 8 hours in prep or A&A.
The following article from the California Board of Accountancy, quoted with permission, provides more detailed explanation. Since it is quoted verbatim, I won’t put quotes around the entire article.
NEW CONTINUING EDUCATION REQUIREMENT FOR PREPARATION ENGAGEMENTS
CPAs who perform preparation engagements as their highest level of service are subject to a new continuing education (CE) requirement.
2017 Risk Alerts available
Image of Audit Risk Alert is from AICPA. Used under Fair Use since, after all, I am promoting three of their products.
The 2017 audit season is about to begin. Planning is well underway for all those 12/31 clients.
To help you get ready, the annual updates to AICPA risk alerts are available. Consider:
- General Accounting and Auditing Developments – 2016/17 Audit Risk Alert
- Developments in Preparation, Compilation, and Review Engagements 2016/17
- Government Auditing Standards and Single Audit Developments – Audit Risk Alert (16/17 edition)
I read the risk alerts every year. They are great for reminding me of what I already knew and even better for pointing out what tidbits I had missed.
You might want to check them out in the lull before the rush of field work hits.
“Be Prepared – A Comprehensive Peer Review Update”
Image courtesy of Adobe Stock.
The following article provides a superb update on recent developments in the peer review program. The article is graciously provided by the California Society of CPAs and the information described here applies in all jurisdictions across the U.S.
Because the entire article is quoted verbatim without any additional comments from me, none of the article will be placed in quotation marks.
Originally published by CalCPA (www.calcpa.org) in the October issue of California CPA magazine.
Used with written permission of the California Society of CPAs.
Be Prepared – A Comprehensive Peer Review Update
By Linda McCrone
Peer review is a successful program that helps firms improve their quality control systems and elevate the quality of accounting and auditing engagements. The AICPA contributed the software program that tracks peer reviews and the staff that manages the program. AICPA member volunteers contribute their time to oversee the program, keep the peer review program forms current and make certain that the peer review standards remain relevant. But like any successful program, peer review must continue to evolve to keep up with events.
Background
Dividing line between bookkeeping and preparation services
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.
CPE courses on SSARS 21 in development
I’m in the process of writing and rewriting a series of CPE courses on compilations, reviews, and preparation services. These courses will describe the changes made from SSARS #21, which is a major rewrite of the comp and review rules.
These courses will be a major overhaul of what I wrote three years ago for CCH.
Stay tuned for more info as the courses become available.
Here’s the courses on SSARS 19 I wrote or updated: Read the rest of this entry »
Flash update on SSARS #21
The new statement that overhauls the SSARS body of knowledge and opens up a new service called preparation was released on October 23, 2014.
Update – See also:
- Effective date of SSARS #21 and ideas on how to use the early implementation option
- Newly approved SSARS will allow a new service, ‘preparation’. Will also require written & signed engagement letters.
- Sample compilation report under SSARS 21
- Sample accountant’s review report for SSARS 21
- New risk alerts for 2014/2015 are available
- Video overview of SSARS 21
From the 30,000 foot level, here are just a few changes:
Newly approved SSARS will allow a new service, ‘preparation’. Will also require written & signed engagement letters.
Update – See also:
- Flash update on SSARS #21
- Effective date of SSARS #21 and ideas on how to use the early implementation option
- Sample compilation report under SSARS 21
- Sample accountant’s review report for SSARS 21
- New risk alerts for 2014/2015 are available
- Video overview of SSARS 21
In August, the Accounting and Review Services Committee approved the clarified SSARS. This rewrites the SSARS into the same clarified format we saw with the audit literature.
The biggest change is the introduction of a new service, called preparation, which will allow a CPA to issue financial statements without providing an accountant’s report or performing procedures on the information.
In highly condensed terms, Read the rest of this entry »
