Review reports will change starting December 31, 2010. Two sample reports follow.
Update – SSARS 19 had been replaced by SSARS 21. All the reports have been revised. You can check out these posts at my other blog, Attestation Update:
- Flash update on SSARS #21
- Newly approved SSARS will allow a new service, ‘preparation’. Will also require written & signed engagement letters.
- Sample compilation report under SSARS 21
- Sample accountant’s review report for SSARS 21
- Video overview of SSARS 21
- New risk alerts for 2014/2015 are available
(Transition is actually December 15, but I doubt anyone reading this blog has clients with those types of year-end cutoffs.) I have prepared the standard reports I will be using after the first of the year for my non-profit clients. They are listed below. Included are a single year and two-year comparative report. Please feel free to copy and modify based on your firm’s policies.
SSARS 19 makes many other changes for compilations and reviews. Would be good to do some studying before the end of the year. I have blocked out two samples of the new compilation report here.
Single year report:
Independent Accountant’s Review Report
Board of Directors
Orgname
Citystate
Dear Board of Directors: (see reason for change on 11-19-11 at this post)
I (We) have reviewed the accompanying statement of financial position of Orgname as of December 31, 2010, and the related statements of activity and cash flows for the year then ended. A review includes primarily applying analytical procedures to management’s financial data and making inquiries of management. A review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, I (we) do not express such an opinion.
Management is responsible for the preparation and fair presentation of the financial statements in accordance with U.S. generally accepted accounting principles and for designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of the financial statements.
My (Our) responsibility is to conduct the review in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. Those standards require me (us) to perform procedures to obtain limited assurance that there are no material modifications that should be made to the financial statements. I (We) believe that the results of my (our) procedures provide a reasonable basis for my (our) report.
Based on my (our) review, I am (we are) not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with U.S. generally accepted accounting principles.
Monthday, 2011
Comments:
- Above example has been modified for a nonprofit organization.
- Delete the singular or plural pronouns (I/We) depending on whether you are a single partner or multi-partner firm.
- Original text contains “accounting principles generally accepted in the United States of America” instead of “U.S. generally accepted accounting principles”. The SASs allow the use of US GAAP. I believe that phrasing makes much more sense for my client base, so have changed the text to the GAAP format. Your firm policy may be different, so revised it (in two different places!) as needed.
- Text that will change for each client is input with intentional misspelling (see orgname, citystate, monthday), so if you forget to change the data, a spell check will remind you.
Two year comparative report:
(Update 2-2-11 – I got ahead of the professional literature when I wrote this post. SSARS 19 does not actually address comparative financials when the prior year was reported upon with pre-SSARS 19 language. The AICPA staff have issued a Q&A document addressing this. See this post. The following wording fits that Q&A document quite well.)
Independent Accountant’s Review Report
Board of Directors
Orgname
Citystate
Dear Board of Directors: (see reason for change on 11-19-11 at this post)
I (We) have reviewed the accompanying statements of financial position of Orgname as of December 31, 2010 and 2009, and the related statements of activity and cash flows for the years then ended. A review includes primarily applying analytical procedures to management’s financial data and making inquiries of management. A review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, I (we) do not express such an opinion.
Management is responsible for the preparation and fair presentation of the financial statements in accordance with U.S. generally accepted accounting principles and for designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of the financial statements.
My (Our) responsibility is to conduct the reviews in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. Those standards require me (us) to perform procedures to obtain limited assurance that there are no material modifications that should be made to the financial statements. I (We) believe that the results of my (our) procedures provide a reasonable basis for my (our) report.
Based on my (our) reviews, I am (we are) not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with U.S. generally accepted accounting principles.
Monthday, 2011
Update: I have written a 3-hour online CPE course called Compilation and Review: Practice Issues (Third Edition) available at the CCH Learning Center website. From the course description:
This course was prepared to enable participants who are experienced accountants to improve their knowledge of the issues affecting their compilation and review practices.
Course discussed in more detail at this post. If you like the writing you see on this website, check out the Practice Issue course.