ARSC proposals seek flexibility, harmony

Separate proposals by the AICPA Accounting and Review Services Committee (ARSC) would provide flexibility in performing and reporting on a procedures and findings service and would create a new omnibus standard.

Under Proposed Statement on Standards for Attestation Engagements, Selected Procedures, practitioners would be permitted to perform procedures and report in a procedures and findings format beyond what’s currently provided by AT-C Section 215, Agreed-Upon Procedures Engagements.

In a selected procedures engagement as proposed, a practitioner would be permitted to determine the procedures to be performed, and no party would be required to take responsibility for the sufficiency of the procedures.

This would allow the practitioner to perform the engagement when the specified parties may not be able or willing to fully develop or determine procedures without having to perform a separate consulting services engagement.

Meanwhile, the new omnibus standard proposed by ARSC would, if issued as a final standard, provide requirements and guidance for compilations and reviews of financial statements prepared in accordance with a financial reporting framework generally accepted in another country—or performed in accordance with both the Statements on Standards for Accounting and Review Services (SSARS) and another set of compilation and review standards.

The proposed guidance is contained in an exposure draft, Proposed Statement on Standards for Accounting and Review Services, Omnibus SSARS—2018. The proposal, if issued as a final standard, would:

• Create new AR-C Section 100, International Reporting Issues;
• Withdraw Interpretation No. 1, “Considerations Related to Reviews Performed in Accordance With International Standard on Review Engagements (ISRE) 2400 (Revised),” to AR-C Section 90, Review of Financial Statements; and
• Amend other AR-C sections.

In addition to addressing international financial reporting issues, the proposal would substantially harmonize requirements for the accountant to consider an entity’s ability to continue as a going concern in a review engagement with the requirements in AU-C Section 930, Interim Financial Information. The proposal also would include a specific written representation regarding disclosure of all information relevant to the use of the going concern assumption in the financial statements.

The proposal also would provide requirements and guidance to address practice issues identified when accountants reference the work of other accountants in an accountant’s review report.

Comments may be emailed to Mike.Glynn@aicpa-cima.com by Dec. 1 on the new attestation service proposal and by Dec. 14 on the omnibus proposal.