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AICPA Modernizes Non-Audit Standards for Accountants in Public Practice(Targeted News Service Via Acquire Media NewsEdge) NEW YORK, Oct. 21 -- The American Institute of Certified Public Accountants issued the following news release: The American Institute of CPAs (AICPA) is poised to introduce Statement on Standards for Accounting and Review Services No. 21 (SSARS No. 21), which is one of the most significant revisions in non-audit standards in the last 35 years. SSARS No. 21 represents the AICPA's Accounting and Review Services Committee's (ARSC) efforts to clarify and revise the standards for members in public practice who perform reviews, compilations, and engagements to prepare financial statements. Approved by ARSC in August, it creates a bright line between accounting (preparation) services and reporting (compilation or review) services and is a better fit for the current electronic and cloud-based practice environment. The basic standard for accountants who have prepared and submitted financial statements to their clients was issued as SSARS No. 1 in 1978, said Michael L. Brand, chair of ARSC and a partner with the firm of Johnson, Feigley, Newton & Brand in Athens, Alabama. "Back then, accountants prepared paper financial statements, bound them with their firm's covers and mailed them or handed them to their clients. It made sense, for many years, that because these were submitted by the CPA, the CPA should, at a minimum, issue a compilation report on those financial statements," Brand explained. "However, in today's electronic environment, especially cloud applications where the client and CPA are working on the accounting together and sometimes in real time, it's impossible to segregate who prepared the financial statements, let alone whether the CPA submitted financial statements. Section 80 of SSARS No. 21 totally eliminates the need for such arbitrary and irrelevant decisions by making the compilation literature apply when the accountant is engaged to perform a compilation service." In addition, to help firms that are asked by their smaller clients to prepare financial statements when that client does not need a compilation or review report, SSARS No. 21 includes a new preparation standard. Further, Section 70 does not require an accountant's name or report to be associated with the preparation of the financial statements, but it also does not prohibit a CPA from doing so, according to AICPA Senior Technical Manager Michael Glynn. "Therefore, to ensure that users are not misled by thinking that an accountant is providing any assurance on the financial statements, the standard requires a legend on each page of the financial statements indicating, at a minimum, that 'no assurance is provided' on the financial statements." The newly-revised standards are effective for engagements on financial statements for periods ending on or after December 15, 2015. Early implementation will be permitted. To help familiarize CPAs with the streamlined standards, the AICPA will host a video webcast featuring Brand and Glynn on Thursday, October 23 from 2:00 p.m. to 4:00 p.m. (ET). Credentialed journalists are invited to view the event free of charge. Reporters who wish to register for the event should contact Mitchell Slepian at [email protected]. [Category: Accounting] TNS 18EstebanLiz-141022-30FurigayJane-4907880 30FurigayJane (c) 2014 Targeted News Service |