Compilation and Review

This course informs the reader of the various changes made to the compilation and review standards by the AICPA’s Accounting and Review Services Committee (ARSC), and addresses practice issues related to compilation and review engagements.

Included in this course is an overview of SSARS No. 21, as amended by SSARS No. 23, Omnibus Statement on Standards for Accounting and Review Services- 2016, and SSARS No. 24, Omnibus Statement on Standards for Accounting and Review Services- 2018. The course addresses the three types of engagements that can be performed under the SSARSs: a preparation of financial statements engagement, a compilation engagement, and a review engagement. The course also addresses SSARS No. 22, Compilation of Pro Forma Financial Information.

The course also includes practice issues in compilation and review engagements. Topics include an accountant’s responsibility for fraud, internal control and going concern, representation letters for review engagements, personal financial statements, tax-basis financial statements, legends on financial statements, an accountant’s liability in compilation and review engagements, saving time in engagements, and more.

Course Info:

Course #: 2045F
Delivery: Self-Study
CPE Hours: 20
Course Level: Basic
Prerequisites: None
Advanced Preparation: None
NASBA Area of Study: Accounting
Total Pages: 630
Questions: 100

Course Objectives

To identify some of the changes in SSARS No. 21, as amended by SSARS No. 23, that are and are not carried over from auditing standards
To recognize engagement types that are and are not part of SSARS No. 21
To recall whether the preparation of financial statements standard is an attest or nonattest service
To recall what must happen for an accountant to perform a preparation of financial statements engagement
To recall whether a preparation engagement under AR-C 70 is subject to peer review
To identify whether a report is required in a preparation of financial statements engagement under AR-C 70
To recognize what the reporting requirements are, if any, when a “no assurance” legend is omitted from prepared financial statements under the AR-C 70 standards
To identify where to disclose GAAP departures in a preparation of financial statements engagement
To recognize whether an accountant and his or her client must sign an engagement letter for a preparation of financial statements engagement under AR-C 70
To recall the objective of a compilation engagement under AR-C 80 of SSARS No. 21
To identify how an accountant should report on a disclaimer of supplementary information in a compilation engagement
To identify requirements to be satisfied to perform a review engagement under AR-C 90
To identify evidence an accountant should obtain to demonstrate that financial statements reconcile with accounting records
To recognize an appropriate title that can be used for a review report under SSARS No. 21
To identify the order in which certain report paragraphs should be placed in the SSARS No. 21 review report
To recall some of the items that should and should not be documented in a review engagement
To identify the reporting options for controllers who seek to issue financial statements
To recognize the accountant’s responsibility for reporting fraud in compilation and review engagements
To identify the period of time that defines “reasonable period of time” in going concern
To identify factors that may or may not suggest there is a potential going concern problem in a compilation or review engagement
To recognize the threshold to evaluate an Altman Z Score
To identify an example of a deferred M-1 that is eliminated by tax-basis financial statements
To recognize some of the general rules for tax-basis financial statements
To identify the options available to report on supplementary information in a compilation or review engagement
To recognize the general disclosure rules when issuing a compilation report on a specified element
To identify when a management representation letter is required and some general rules pertaining to such letters
To identify a prescribed form and the options for reporting on personal financial statements
To recognize some of the recurring deficiencies noted in peer reviews
To identify examples of simpler reporting options to full GAAP financial statements
To identify provisions to incorporate into engagement letters to protect the accountant against liability claims
To recognize the general rules to maintain independence when an accountant performs non-attest services for an attest client
To identify when independence is impaired in certain situations in which an accountant performs non-attest services for an attest client
To recognize the privity standard as it relates to the accountant’s liability to third parties

Table of Contents

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