The AICPA’s Accounting and Review Services Committee (ARSC) has issued two exposure drafts of proposed Statements on Standards for Accounting and Review Services (SSARS). One of the proposed Statements, Standards for Accounting and Review Services establishes a SSARS hierarchy.

In addition, the proposed Statement addresses a technical correction to SSARS No. 2, Reporting on Comparative Financial Statements (AICPA, Professional Standards, vol. 2, AR sec. 200). The proposed Statement will revise SSARS No. 2 (AR sec. 300.27, footnote 9) to conform with the guidance found in Statement on Auditing Standards No. 58, Reports on Audited Financial Statements (AICPA, Professional Standards, vol. 1, AU sec. 508.74, footnote 29), as amended, which states that a successor auditor may name the predecessor auditor if the predecessor auditor’s practice was acquired by, or merged with, that of the successor auditor. The proposed Statement would be effective upon issuance.

Performance of Review Engagements, the other proposed Statement, would revise SSARS No. 1 to expand on previously provided guidance on analytical procedures, inquiries, and other review procedures; provide inquiries regarding fraud in a review engagement and require representations regarding fraud in the management representation letter; and clarify and provide guidance regarding workpaper documentation in a review engagement. The proposed Statement would be effective for reviews of financial statements for periods ending on or after December 15, 2004.

Each exposure draft is available to download as a PDF file from the AICPA’s website.

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Download the Statement document now.

Comments should be sent via electronic mail to Michael Glynn at mglynn@aicpa.org and received no later than April 11, 2004. To facilitate the ARSC’s consideration of responses, comments should refer to specific paragraphs and include supporting reasons for each suggestion or comment. Comments will become part of the public record of the AICPA and will be available for public inspection at the offices of the AICPA after May 11, 2004, for one year.