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Course Details

Practice Issues - Compilation and Review Update [Including SSARS Nos. 21-23] (Course Id 760)

Updated / QAS / Registry   Add to Cart 
Author : Steven C Fustolo, CPA, MBA
Status : Production
CPE Credits : 20.0
IRS Credits : 0
Price : $149.95
Passing Score : 70%
NASBA Technical: Yes
Primary Subject-Field Of Study:

Auditing - Auditing for Course Id 760

Description :

Section I of this course consists of an overview of SSARS No. 21, as amended by SSARS No. 23, Omnibus Statement on Standards for Accounting and Review Services- 2016. 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 discusses SSARS No. 22, Compilation of Pro Forma Financial Information.

Section II consists of practice issues in compilation and review engagements. Topics include a discussion of 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, accountant’s liability in compilation and review engagements, saving time in engagements, and more. The focus of the course is to identify, recognize and recall the rules pertaining to various pronouncements, including those related to recent developments.

Usage Rank : 0
Release : 2017
Version : 1.0
Prerequisites : General understanding of compilation and review standards.
Experience Level : Overview
Additional Contents : Complete, no additional material needed.
Additional Links :
Advance Preparation : None.
Delivery Method : Self-Study
Intended Participants : Anyone needing Continuing Professional Education (CPE).
Revision Date : 08-Jun-2017
NASBA Course Declaration : Participants must complete the final examination within one year of purchase and with a minimum passing grade of 70% or better to receive CPE credit unless otherwise noted on the Course History page (i.e. California Ethics must score 90% or better). After logging in click on the Course History links on your My Courses page for the Begin date and Expire date for the Final Exam.
Approved Audience :

NASBA QAS - NASBA Registry - 760

Keywords : Auditing, Practice, Issues, Compilation, Review, Update, [Including, SSARS, Nos., 21-23], cpe, cpa, online course
Learning Objectives :

Course Learning Objective

The objective of this course is to inform the reader of the various changes made to the compilation and review standards by the AICPA’s Accounting and Review Services Committee (ARSC), and to address practice issues related to compilation and review engagements.

Chapter I
SSARS No. 21-23 The New Compilation and Review Standards. Statements on Standards for Accounting and Review Services

After reading the Chapter I course material, you will be able 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
  • Recognize engagement types that are and are not part of SSARS No. 21
  • Recall whether the new preparation of financial statements standard is an attest or nonattest service
  • Recall what must happen for an accountant to perform a preparation of financial statements engagement
  • Recall whether a preparation engagement under AR-C 70 is subject to peer review
  • Identify whether a report is required in a preparation of financial statements engagement under AR-C 70
  • 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
  • Identify where to disclose GAAP departures in a preparation of financial statements engagement
  • 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
  • Recall the objective of a compilation engagement under AR-C 80 of SSARS No. 21
  • Identify some procedures that must be performed in a compilation engagement under AR-C 80 of SSARS No. 21
  • Recognize some of the documentation requirements in a compilation engagement
  • Identify how an accountant should report on a disclaimer of supplementary information in a compilation engagement
  • Identify requirements to be satisfied to perform a review engagement under AR-C 90
  • Identify evidence an accountant should obtain to demonstrate that financial statements reconcile with accounting records
  • Recognize an appropriate title that can be used for a review report under SSARS No. 21
  • Identify the order in which certain report paragraphs should be placed in the SSARS No. 21 review report
  • Recall some of the items that should be documented in a review engagement
  • Recognize the effective dates of SSARS No. 21 including early implementation options

Chapter II
Practice Issues

After reading the Chapter II course material, you will be able to:
  • Identify the reporting options for controllers who seek to issue financial statements
  • Recognize the accountant’s responsibility for reporting fraud in compilation and review engagements
  • Identify factors that may or may not suggest there is a potential going concern problem in a compilation or review engagement
  • Recognize the threshold to evaluate an Altman Z Score
  • Identify an example of a deferred M-1 that is eliminated by tax basis financial statements
  • Recognize some of the general rules for tax basis financial statements
  • Identify the options available to report on supplementary information in a compilation or review engagement
  • Recognize the general disclosure rules when issuing a compilation report on a specified element
  • Identify when a management representation letter is required and some general rules pertaining to such letters
  • Identify a prescribed form and the options for reporting on personal financial statements
  • Recognize some of the recurring deficiencies noted in peer reviews
  • Identify examples of simpler reporting options to full GAAP financial statements
  • Identify provisions to incorporate into engagement letters to protect the accountant against liability claims
  • Recognize the general rules to maintain independence when an accountant performs non-attest services for an attest client
  • Identify when independence is impaired in certain situations in which an accountant performs non-attest services for an attest client
  • Recognize the privity standard as it relates to the accountant’s liability to third parties
Course Contents :

Chapter I - SSARS No. 21-23 The New Compilation and Review Standards. Statements on Standards for Accounting and Review Services

A.  Issued

B.  Effective Dates

C.  Objective

D.  Background

AR-C Section 60- General Principles for Engagements Performed in Accordance with Statements on Standards for Accounting and Review Services

A.  Introduction

B.  Key Changes Made in AR-C 60

C.  Requirements for Performing SSARS Engagements

Review Questions and Suggested Solutions

 

AR-C Section 70- Preparation of Financial Statements

A.  Effective Date

B.  Introduction

C.  Scope of AR-C 70

D.  Summary of a Preparation of Financial Statements Engagement

E.  General Rules in Applying a Preparation of Financial Statements Engagement Under AR-C 70

F.  Specific Rules for Preparing Financial Statements per AR-C 70

G.  Documentation in a Preparation Engagement

H.  Engagement Letter- Preparation of Financial Statements Engagement

I.  Illustrative Financial Statements- AR-C 70

Review Questions and Suggested Solutions

 

AR-C Section 80- Compilation Engagements

A.  Introduction

B.  Effective Date

C.  Scope of AR-C 80- Compilation Engagements

D.  Objective of a Compilation Engagement

E.  Definitions

F.  Requirements- Compilation Engagements- AR-

G.  Engagement Letter- Compilation

H.  The Accountants Knowledge and Understanding of the Entitys Financial Reporting Framework- Compilation Engagement

I.  Compilation Procedures

J.  The New Accountants Compilation Report

K.  Elimination of Management-Use Only Financial Statements

L.  Examples of the Accountants Compilation Reports on Financial Statements

M.  Documentation in a Compilation Engagement

N.  Change from an Audit or Review Engagement to a Compilation Engagement

Review Questions and Suggested Solutions

 

AR-C Section 90: Review of Financial Statements

A.  Introduction

B.  Effective Date

C.  Scope of AR-C 90- Review Engagements

D.  Objective

E.  Requirements for Performing a Review Engagement Under AR-C 90

F.  Engagement Letter- Review Engagement

G.  Communication with Management and Those Charged with Governance

H.  Understanding of the Industry

I.  Knowledge of the Entity

J.  Designing and Performing Review Procedures

K.  Analytical Procedures

L.  Inquiries of Members of Management Who Have Responsibility for Financial and Accounting  Matters

M.  Reading the Financial Statements

N.  Using the Work of Other Accountants

O.  Reconciling the Financial Statements to the Underlying Accounting Records

P.  Evaluating Evidence Obtained from the Procedures Performed

Q.  Materiality

R.  Written Representations in a Review Engagement

S.  Reporting on Reviewed Financial Statements

T.  Review Documentation

Review Questions and Suggested Solutions

 

Chapter II - Practice Issues- Part 1

A.  Controllers Issuing Financial Statements

B.  Distributing Draft Financial Statements

C.  Consideration of Fraud in a Compilation and Review Engagement

D.  Analytical Procedures in a Review Engagement

E.  Using Staff in a Compilation or Review Engagement

F.  Titles on Compilation and Review Reports- SSARS No. 21

G.  Legends on Compiled or Reviewed Financial Statements

H.  Going Concern: Compilation and Review Engagements

I.  Responsibility for Incomplete Information- Compilation Engagement

Review Questions and Suggested Solutions

 

J.  Using Tax-Basis Financial Statements for Engagement Profitability

K.  Miscellaneous Practice Issues

L.  Communications Between Predecessor and Successor Accountants

M.  Selected Information- Substantially All Disclosures Required by Accounting Principles Generally Accepted in the United States of America Are Not Included

N.  Gathering Review Evidence Under SSARS No. 21

Review Questions and Suggested Solutions

 

O.  Responsibility for Materiality in a Compilation and Review Engagement

P.  Restricting the Use of an Accountants Compilation or Review Report

Q.  Reporting of Specified Elements, Accounts, or Items of a Financial Statement

R.  Management Representation Letter- Review Engagement

S.  Applicability of Auditing Standards to the SSARSs

T.  Reconciling the Financial Statements to the Underlying Accounting Records

Review Questions and Suggested Solutions

 

Chapter II - Practice Issues- Part 2

A.  Personal Financial Statements and Prescribed Forms

B.  Financial Statements Submitted Electronically

Review Questions and Suggested Solutions

 

C.  Peer Review Standards

D.  GAAP Hierarchy: Compilation and Review

Review Questions and Suggested Solutions

 

E.  Simplifying the Reporting Process

F.  Squeezing the Heck Out of a Review Engagement:  The 25-Hour Review

G.  Designing Effective Engagement Letters

H.  Liability to Accountants Who Perform Bookkeeping Services

I.  Risk of Open-Ended and Multi-Year Engagement Letters

J.  Avoid Being Sued and Increase Billing-The Likeability and Communication Factors

K.  Definition of a Financial Statement Versus Trial Balance

L.  Reporting on a Tax Return

M.  Emphasis-of-Matter and Other-Matter Paragraphs in a Compilation Report on Financial Statements That Omit Substantially All Disclosures

Review Questions and Suggested Solutions

 

N.  Ethics and Independence Rule Changes

O.  Responsibility to Third Parties: The Privity Standard

P.  Providing Records to a Dead-Beat Client

Q.  Number of Days Test on Trade Receivables

Review Questions and Suggested Solutions

 

Glossary

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