Samuel R Baker CPA, CFP®

Certified Public Accountant & Certified Financial Planner

1-847-478-9901

Serving Buffalo Grove & Northern Illinois for over 35 years

318 Half Day Rd #288, Buffalo Grove IL 60089

srb@cpa-network.com

AICPA brings accounting and review standards into the 21st century
November 6, 2014

The American Institute of Certified Public Accountants (AICPA) has issued Statement on Standards for Accounting and Review Services (SSARS) No. 21. Some analysts say this update is the biggest change to the accounting and review standards since they were issued more than 35 years ago..

The clarified guidance will help financial statement users differentiate between when an accountant performs a compilation engagement, prepares the financial statements or merely assists management in preparing financial statements. This distinction is critical in a cloud-computing environment where internal management and external advisors often collaborate contemporaneously on financial recordkeeping.

Accounting and review standards clarified
 SSARS 21 uses the reference “AR-C” to distinguish the clarified accounting and review standards from the old (“AR”) ones. For instance, AR-C 60, General Principles for Engagements Performed in Accordance With Statements on Standards for Accounting and Review Services,provides an overview to clarify accountants’ professional responsibilities when performing preparation, compilation and review engagements. As CPA firms implement SSARS 21 during the next year, they’ll follow three other clarified standards, listed in ascending order of ssurance each service level provides:    1) AR-C 70, Preparation of Financial Statements, 2) AR-C 80, Compilation Engagements,and     3) AR-C 90, Review of Financial Statements. 

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