Compilation and review

Compilation and Review

The Accounting and Review Services Committee issued Interpretation no. 31, Preparation of Financial Statements for Use by an Entity’s Auditors, of AR section 100, Compilation and Review of Financial Statements. The document, available at, provides guidance for situations in which a client engages an accountant, other than its auditor,

AICPA Issues Exposure Draft of Proposed SSARS

The AICPA’s Accounting and Review Services Committee issued an exposure draft of a proposed Statement on Standards for Accounting and Review Services (SSARS), Applicability of Statements on Standards for Accounting and Review Services. The exposure draft proposes to amend AR section 100. Under the proposal, SSARSs would not apply when

Refocusing on Reliability

EXECUTIVE SUMMARY Current technical literature precludes CPAs from performing review engagements when independence is impaired and requires modifying reports to disclose lack of independence in compilation engagements. The AICPA Reliability Task Force asserts that the conceptual foundation regarding the services CPAs provide to clients should be modified to refocus on

Audit Confirmation Article Falls Short

As an auditor by training, I was excited to see the article on improving the confirmation process (“Better Evidence Gathering ,” April 08, page 32). The opening paragraphs rightfully acknowledged that many budgets are blown because of time spent chasing confirmation letters until the eleventh hour— usually taking four to

Better Evidence Gathering

Well-designed audit confirmation practices provide valuable third-party evidence that sheds light on financial statement assertions made by management. Confirmations can be an effective tool for auditors working with accounts including payables and receivables, inventory, investment securities, lines of credit and other actual or contingent liabilities. The procedures also can supply


The SEC’s Committee on Improvements to Financial Reporting voted in January to support a slate of preliminary recommendations designed to make the information presented by U.S. public companies more useful to investors while reducing the complexity of the financial reporting system. The preliminary proposals included a call for reducing industry-specific

Fashioning a Fraud

EXECUTIVE SUMMARY Businesses must clearly define the roles and responsibilities of employees who sign expense reports and those who process the reports. That should eliminate confusion about whether a manager’s signature means that the individual is authorizing the expenses as reasonable business expenses or signifies that the manager reviewed the

A Risk-Based Approach to Journal Entry Testing

EXECUTIVE SUMMARY The top-side journal entry is most susceptible to fraud by management override. It’s possible to make adjustments in subledgers, but this requires collusion with other organizational departments, which is much harder to accomplish. The most frequent types of management fraud involve fictitious or premature revenue recognition. One way

Mining Audit Research

This column is the first of a series that will review accounting research journals to distill practical pointers for busy CPAs. The resulting summaries offer useful suggestions practitioners can apply immediately to day-to-day activities. This installment is devoted to auditors in the field. “Audit Partner Tenure and Audit Quality,” by

New Fraud Guidance

January 2006 > New Fraud Guidance COMPILATIONS / REVIEWS Communication is the name of the game where fraud is suspected. New Fraud Guidance BY J. RUSSELL MADRAY EXECUTIVE SUMMARY SSARS NO. 12, Omnibus Statement on Standards for Accounting and Review Services—2005, amended SSARS no. 1, making specific changes regarding the

New Fraud Guidance

EXECUTIVE SUMMARY SSARS NO. 12, Omnibus Statement on Standards for Accounting and Review Services—2005, amended SSARS no. 1, making specific changes regarding the practitioner’s consideration of fraud and illegal acts in compilation and review engagements. ALTHOUGH COMPILATION AND REVIEW performance standards don’t require CPAs to assess the risk of fraud,

Compilation and Review Statement Amended

The AICPA accounting and review services committee issued guidance that provides options for accountants when submitting unaudited financial statements not expected to be used by a third party. SSARS no. 8, Amendment to Statement on Standards for Accounting and Review Services No. 1, Compilation and Review of Financial Statements, also


Why cybercriminals are targeting CPAs

This free report expands on the most commonly found scams, why education and specialized IT knowledge help to lessen security vulnerabilities, and why every firm should plan carefully for how it would respond to a breach.


How tax reform will impact individual taxpayers

Amy Wang, a CPA who is a senior technical manager for tax advocacy at the AICPA, answers to some of the most common questions on how the new tax reform law will impact individual taxpayers.