AICPA Issues Guidance on Subsequent Events


New guidance is available on the effect of FASB’s Accounting Standards Codification Topic 855, Subsequent Events, in compilation and review engagements.

 

The AICPA’s Audit and Attest Standards Team issued a new Technical Inquiry and Reply (TPA) 9150.26, “The Accountant’s Responsibilities for Subsequent Events in Compilation and Review Engagements.”

 

According to the TPA, FASB ASC 855, Subsequent Events, does not change the accountant’s responsibilities under AR section 100, Compilation and Review of Financial Statements (AICPA, Professional Standards, vol. 2), which states that an accountant performing a review engagement should inquire of members of management who have responsibility for financial and accounting matters concerning events subsequent to the date of the financial statements that could have a material effect on the financial statements.

 

In a compilation engagement, the accountant has no responsibility with respect to subsequent events unless he or she learns of evidence or information that a subsequent event that has a material effect on the financial statements has occurred.

 

When such evidence or information comes to an accountant’s attention during a compilation or review engagement, he or she should request that management consider the possible effects on the financial statements, including the adequacy of any related disclosure. If the accountant determines that a subsequent event is not appropriately accounted for in the financial statements or disclosed in the notes, he or she should follow the guidance in paragraphs .56–.58 of AR section 100 regarding departures from generally accepted accounting principles, the TPA states.

 

For more, see the full technical practice aid.

SPONSORED REPORT

Get the career toolkit

Download this sponsored report for four must-read articles showcasing tips and best practices for employers and employees.

DOWNLOAD

Filing season quick guide — Tax year 2014

Tax season started Jan. 20. Download our “quick guide,” a printable card that contains dollar thresholds, tax tables, standard amounts, credits, and deductions to keep at your fingertips during tax season.

TAX NEWS

Expired tax provisions extended for 2014

President Barack Obama signed legislation that retroactively extended more than 50 expired tax provisions for 2014, allowing taxpayers to take advantage of a host of tax incentives during this filing season.