AICPA Extends Comment Deadlines

By Anne Rosivach

Two committees of the American Institute of CPAs (AICPA) - the Professional Ethics Executive Committee (PEEC) and the Accounting and Review Services Committee (ARSC) - have extended deadlines on exposure drafts of proposed revisions of existing requirements for nonattest services and of requirements for compilation services. 
 
Requirements of Nonattest Services
The PEEC has agreed to extend the deadline from August 30, 2012, to November 30, 2012, for comments on an exposure draft dated June 29, 2012, of proposed revisions to Interpretation 101-3, "Nonattest Services."
 
  • The committee is proposing that financial statement preparation and cash-to-accrual conversions performed by a CPA member for a client should be considered nonattest services and subject to the revised requirements. 
  • Under the proposed revisions, the preparer is no longer required to perform a compilation with respect to those statements unless engaged to do so. 
  • The exposure draft also considers the cumulative effect that providing multiple nonattest services can have on independence.
 
"We have extended the deadline because we want to give people additional time to understand the impact of these changes," said Ellen Goria, senior technical manager of AICPA's Professional Ethics Division. "We expect the major impact to be experienced by individuals who are preparing financial statements for attest clients. Their systems and processes may need to be modified so that they can be in compliance. We will be providing additional documents to explain this further," she said.
 
Requirements for Compilation Services 
The ARSC has extended its deadline for comment on proposed revisions to Statements on Standards for Accounting and Review Services (SSARS) to November 30, 2012. The proposed revised SSARS are AR section 70, Association with Unaudited Financial Statements, and AR section 80, Compilation of Financial Statements (Revised)
 
Existing SSARS require the accountant to perform a compilation engagement whenever the accountant prepares and presents financial statements to a client or third parties. Proposed revisions to SSARS would remove the preparation of financial statements from the attest function, the exposure draft says. 
 
The AICPA stated in its announcement that the proposed SSARS would also "revise the objective of the compilation engagement and provide requirements and guidance when an accountant is associated with financial statements that were not subjected to a compilation, review, or audit engagement."
 
The Exposure Draft, Association with Unaudited Financial Statements, includes the following requirements if an accountant is requested to be associated with unaudited financial statements. 
 
The accountant should: 
  1. Read the unaudited financial statements. 
  2. Consider whether the unaudited financial statements appear free from material inconsistencies with other knowledge or information of which the accountant may be aware. 
  3. If after performing the procedures in paragraphs 6a and 6b, the accountant decides to permit the use of the accountant's name in a report, document, or written communication containing the statements, the accountant should request that the entity clearly indicate that the financial statements were not compiled, reviewed, or audited. 
 

There's more on AWEB!

Do you have colleagues or clients who might like to receive the free AccountingWEB newsletter?
• Practice
• Education
• Tax
• A&A
• Technology
• Wealth Management

The proposed SSARS also addresses the accountant's responsibilities when engaged to compile financial statements. The proposed revisions state that the objectives of a compilation engagement provide definitions and enumerate specific requirements that apply to compilation engagements.

 
The ARSC stated in its exposure draft that it "is supportive of proposed revisions of Interpretation 101-3 because it is in harmony with how the 2011 edition of Government Auditing Standards (the Yellow Book) treats the preparation of financial statements. The proposed clarification would also be consistent with the views of many practitioners who believe that the preparation of financial statements is a responsibility of management and an essential part of an entity's system of internal control."
 
Related articles:
 

You may like these other stories...

Anti Burger Kings: Seven US companies shrinking tax the old-fashioned wayBurger King’s decision to combine with Canadian donut shop Tim Hortons is renewing controversy over the lengths some US companies will go to...
Read more from Larry Perry here and in the Today's World of Audits archive.Since the AICPA's Financial Reporting Framework for Small- to Medium-sized Entities (FRF for SMEs) and some other financial reporting...
The US Securities and Exchange Commission (SEC) has chosen a former partner and vice chairman with Deloitte LLP as its new chief accountant.James Schnurr, who specialized in financial and SEC reporting for public companies...

Already a member? log in here.

Upcoming CPE Webinars

Aug 28
Excel spreadsheets are often akin to the American Wild West, where users can input anything they want into any worksheet cell. Excel's Data Validation feature allows you to restrict user inputs to selected choices, but there are many nuances to the feature that often trip users up.
Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 10
Transfer your knowledge and experience to prepare your team for the challenges and opportunities of an accounting career.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.