ssars 21 training powerpoint template

Insert Your Firm’s Logo Here Exploring SSARS 21: A Look at An Overview of the Changes and Impacts for Our Preparation, Compilation and Clients and Our Practice Review Services Instructions To Firms Below are some suggestions when using this PowerPoint to update your team members on SSARS 21 • This PowerPoint is an overview of significant changes to compilation and review engagements and an introduction to the preparation service It should be used to augment your understanding of SSARS 21 Reviewing this is not a substitute for reading and understanding the actual guidance • Several slides have a comment note for you to consider the application based on your current practices (and consider incorporating relevant examples), and there are likely others throughout the PowerPoint Once you have tailored this PowerPoint to your firm’s current practices, delete this slide Private Companies Practice Section Objective To provide an overview of changes resulting from SSARS 21 • • • • • Overview Effective Dates AR-C 70 - Preparation AR-C 80 - Compilation AR-C 90 - Review Private Companies Practice Section General Overview of SSARS 21 Private Companies Practice Section SSARS 21 Supersedes all existing AR sections except for AR Section 120, Compilation of Pro Forma Financial Information • Prospective financial information is currently codified in Attest Standards Private Companies Practice Section General Overview of SSARS 21 SSARS No 21 is formatted into four separate sections: • • • • Section 60, General Principles for Engagements Performed in Accordance With Statements on Standards for Accounting and Review Services Section 70, Preparation of Financial Statements Section 80, Compilation Engagements Section 90, Review of Financial Statements These sections have been codified with the prefix “AR- C” to denote them from the extant AR sections Private Companies Practice Section Effective Date Effective for financial statement periods ending on or after December 31, 2015 Early implementation is permitted Interim engagements can be performed in accordance with SSARS 21 or SSARS 19 Private Companies Practice Section Section 60 – General Principles Private Companies Practice Section Section 60 – General principles for SSARS Engagements Replaces AR Section 60, Framework for Performing and Reporting on Compilation and Review Engagements Comply with the general principles in Section 60 in addition to the relevant sections based on whether the engagement is a preparation, compilation or review Not expected to result in changes to existing practice Private Companies Practice Section Section 60 – General principles for SSARS Engagements AR-C Section 60 includes requirements with guidance on: • • • • • Ethical requirements Professional judgment Conduct of the engagement Engagement level quality control Acceptance and continuance of client relationships and engagements • Note to firms: Additional details about each of these requirements is included in the speaker notes Firms may choose to add these details as additional slides Private Companies Practice Section 10 Section 80 – Fieldwork No changes to procedures Private Companies Practice Section 25 Section 80 – Financial Statements Supplementary information references, such as “See accountant’s compilation report” or “See independent accountant’s compilation report.” are allowed, but no longer required • Note to Firms: Document firm’s policy regarding if the reference will be used and communicate in training Statements can be prepared with or without disclosures Private Companies Practice Section 26 Section 80 – Reporting A report is always required Management use only financial statements (SSARS engagements) are no longer an option • Preparation engagement under AR-C 70 is an option • Or keep as compilation but with a report • Note to firms: Document process for communicating with clients currently receiving SSARS financial statements and discussing impact with them Streamlined report The city and state where the accountant practices is now required Private Companies Practice Section 27 Section 90 – Review Engagements Private Companies Practice Section 28 Section 90 – Overview of Changes Some changes to the engagement letter Some changes to the management representation letter Some changes to fieldwork requirements Review report has been updated Private Companies Practice Section 29 Section 90 – Planning Updated engagement letter • Signatures by both the accountant and the client are required • Management’s responsibilities are clarified • Language added regarding the form and content of the review report expected to be issued • Statement added that management agrees to - Include the review report in any document containing the related financial statements - Ask the accountant’s permission to so • Considerations with respect to using a special purpose framework • Note to Firms: Document location of engagement letters updated for SSARS 21 Private Companies Practice Section 30 Section 90 - Fieldwork Requirements regarding the performance of analytical procedures have been clarified • Note to Firms: Add reference to updated policies for performing analytical procedures in a review engagement Inquiries are now presumptively required Reconciling the financial statements to underlying accounting records is now specifically required Management representation letter guidance is clarified Private Companies Practice Section 31 Section 90 – Financial Statements Supplementary information references, such as “See independent accountant’s review report.” is allowed, but no longer required • Note to Firms: Document the firm’s policy for including references to supplemental information The concept of required supplementary information is introduced • Defined as information that an accounting standard requires to accompany an entity’s basic financial statements Private Companies Practice Section 32 Section 90 – Reporting Updated report with heading and city and state of accountant’s practice location Modification to the standard report in certain situations Additional requirements for Emphasis of Matter or Other Matter paragraphs Expanded communications with management or those charged with governance Private Companies Practice Section 33 Financial Statement Users Private Companies Practice Section 34 Financial Statement Users Start communicating with users about the new report formats for compilations and reviews • Provide examples of standard reports Users may be concerned that they are receiving something different • Reports have been modified but there is no change to the level of service or assurance previously provided Private Companies Practice Section 35 Next Steps Private Companies Practice Section Implementing The New Standards We will begin implementing SSARS 21 during the planning stage of year end engagements • Start communicating management's responsibilities and changes to compilation and review reports during our planning meetings • Note to firms: Update these bullets with specific instructions you wish to give to your staff Additional materials and documentation provided by the AICPA at AICPA.org/SSARS21 Private Companies Practice Section Reminders Obtain signed updated engagement letters Ensure you’re using the updated reports for compilations and reviews Ensure you’re using the updated management letters for reviews Talk to SSARS engagements clients now to determine level of engagement Private Companies Practice Section 38 Questions? Private Companies Practice Section 39