SSARS Exposure Draft

The Accounting and Review Services Committee (ARSC) has issued an Exposure Draft Proposed Statement On Standards For Accounting And Review Services, The Use of the Accountant’s Name in a Document or Communication Containing Unaudited Financial Statements That Have Not Been Compiled or Reviewed (Amends Statement on Standards for Accounting and Review Services No. 19, Compilation and Review Engagements [AICPA, Professional Standards, vol. 2, AR sec. 60 par. .51-.55]). You have until April 29, 2011 to comment on this proposed amendment.

The amendment would be effective for unaudited financial statements that have not been compiled or reviewed for periods ending on or after December 15, 2011.

The proposed SSARS would create new paragraphs in AR section 60, Framework for Performing and Reporting on Compilation and Review Engagements to cover the accountant’s responsibilities when he or she permits the use of his or her name in a document or written communication containing unaudited financial statements that have not been compiled or reviewed.

This proposed SSARS would establish:

• a requirement that prior to permitting the use of his or her name in a document or written communication containing unaudited financial statements that have not been compiled or reviewed the accountant should read the financial statements and other information in the document and consider whether such financial statements and other information appears free from obvious material misstatements and from material inconsistencies with other knowledge or information that the accountant may have obtained.
• a nonreporting option when the accountant permits the use of his or her name in a document or written communication containing unaudited financial statements that have not been compiled or reviewed provided that the accountant requests that the client clearly indicate that the unaudited financial statements were not compiled or reviewed by the accountant.

You may obtain a copy of the proposed SSARS from the AICPA website http://www.aicpa.org/.

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