The American Institute of CPAs’ Accounting and Review Services Committee clarified a standard on financial statement preparation as part of a client advisory services engagement.
The new Statement on Standards for Accounting and Review Services (SSARS) No. 27, Applicability of AR-C Section 70 to Financial Statements Prepared as Part of a Consulting Services Engagement, says a CPA is not required to apply AR-C Section 70, Preparation of Financial Statements, when the preparation of financial statements is not the primary objective of an engagement that’s performed in accordance with CS section 100, Consulting Services: Definitions and Standards. It will be issued in early April.
Client advisory services, such as controllership and CFO services, have been growing rapidly in recent years and often involve an outside accountant assuming responsibilities that can include acting as the client’s outsourced CFO.
While weighing the potential change, the committee determined that financial statements issued when a CS section 100 is performed present no harm to the users of that statement. The revised language clarifies that while the section is not required to be applied, the accountant is not precluded from applying AR-C section 70, in whole or in part.
“Our goal is to ensure that accountants have the necessary knowledge, tools and resources to serve their clients efficiently and to the best of their ability,” said Sue Coffey, CEO of public accounting at the AICPA, in a statement Monday. “As CAS grows as a service area, natural questions arise as to how to best apply certain standards. Clarifying these standards allows accounting professionals providing these valuable services to do so confidently.”
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