Wiley Practitioner's Guide to GAAS 2017. Flood Joanne M.
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of financial statements for periods ending on or after December 15, 2015.
SSARS No. 21 supersedes all extant AR sections, except for AR Section 120, which will be the subject of a future clarified standard. SSARS No. 21 eliminates all existing SSARS interpretations and incorporates them into the clarified guidance. SSARS No. 21 contains substantive changes to standards for compilations and engagements to prepare financial statements. Those changes are highlighted in the Technical Alert sections and incorporated into the relevant chapters of this book.
SSARS No. 21 results in the following structure:
● 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
In September 2016, the AICPA completed the clarity project with the issuance of SSARS no. 22, Compilation of Pro Forma Financial Information. The guidance is included in the chapter on AR-C 120.
Attestation Standards
In April 2016, the ASB issued SSAE 18, Attestation Standards: Clarification and Recodification. The standards are effective in May 2017 and are included in this publication.
Resources
Wiley Practitioner's Guide to GAAS 2017 contains robust tools to help practitioners implement the clarified standards. Each chapter begins with the source of the code section, the clarified objectives, and definitions, followed by practice guidance. Exhibits and illustrations are integrated into the chapter and clearly identified. Clarified standard references are preceded by “AR-C.”
The AICPA has dedicated a page on its site to the SSARS clarity project, with links to additional resources that may be helpful in implementing the changes: http://www.aicpa.org/SSARSClarity.
Other New Projects
To clarify jurisdictional issues, in January 2016, the ASB issued SAS No. 131, Amendment to Auditing Standards No. 122 Section 700, Forming an Opinion and Reporting on Financial Statements. The amendment clarifies the format of the auditor's report when conducting an audit in accordance with PCAOB standards and in accordance with GAAS. SAS No. 131 is effective for audits of financial statements for periods ending on or after June 15, 2016.
In October 2015, the ASB issued SAS No. 130, An Audit of Internal Control over Financial Reporting That Is Integrated with an Audit of Financial Statements. SAS No. 130 moves the guidance in AT 501 and related Interpretation No. 1, Reporting under Section 112 of the Federal Deposit Insurance Corporation Improvement Act (AT 9501) to the guidance for generally accepted auditing standards. SAS No. 130 creates a new AU-C section – 940.
Guidance from both of these documents is incorporated into this volume.
ABOUT THE AUTHOR
Joanne M. Flood, CPA, is an author and independent consultant on accounting and auditing technical topics and e-learning. She has experience as an auditor in both an international firm and a local firm and worked as a senior manager in the AICPA's Professional Development group. She received her MBA summa cum laude in accounting from Adelphi University and her bachelor's degree in English from Molloy College.
While in public accounting, Joanne worked on major clients in retail, manufacturing, and finance and on small business clients in construction, manufacturing, and professional services. At the AICPA, Joanne developed and wrote e-learning, text, and instructor-led training courses on US and international standards. She also produced training materials in a wide variety of media, including print, video, and audio, and pioneered the AICPA's e-learning product line. Joanne resides on Long Island, New York, with her daughter, Elizabeth. Joanne is the author of several articles for and a contributor to Wiley Insight IFRS and the following Wiley publications:
Financial Disclosure Checklist
Wiley GAAP 2017: Interpretation and Application of Generally Accepted Accounting Principles
Wiley Practitioner's Guide to GAAS 2017: Covering All SASs, SSAEs, SSARSs, and Interpretations
Wiley GAAP: Financial Statement Disclosures Manual (Wiley Regulatory Reporting), coming soon
Wiley Revenue Recognition
And the following AICPA online and live CPE programs:
Audit Staff Essentials, Level 1 – New Hire
Audit Staff Essentials, Level 2 – Experienced Staff
Audit Staff Essentials, Level 3 – Audit Senior/In-Charge
ORGANIZATION AND KEY CHANGES
This book reduces the official language of Statements on Auditing Standards (SASs), Statements on Standards for Attestation Engagements (SSAEs), Statements on Standards for Accounting and Review Services (SSARSs), and the interpretations of those standards into easy-to-read and understandable advice. It is designed to help CPAs in the application of, and compliance with, authoritative standards.
Clarified Auditing Standards
The AICPA's clarified auditing standards are now fully implemented. The Preface contains additional information on the clarity project.
This book follows the sequence of sections of the AICPA Codification of Statements on Auditing Standards, the Codification of Statements on Standards for Attestation Engagements, and the Codification of Statements on Standards for Accounting and Review Services. Sections are divided into the following easy-to-understand parts:
Original Pronouncement. A handy, brief identification of the original standard for the Section.
Definitions of Terms. A glossary of official definitions that gathers in one place explanations of terms that are ordinarily scattered throughout a standard.
Objectives of Section. A behind-the-scenes explanation of the reasons for the pronouncement and a capsule explanation of the most basic ideas of the section.
Requirements. Concise listing and descriptions of those things specifically mandated by the section, and helpful techniques for complying with the fundamental requirements of the section.
Interpretations. A brief summary of each Interpretation.
On the Horizon
Clarified Attestation Standards
SSAE 18 supersedes all existing AT sections and is effective for reports dated after April 30, 2017. The guidance from SSAE is codified in the AT-C sections of AICPA professional standards and appears in the AT-C chapters of this book.
Accounting and Review Standards
The AICPA has issued an exposure draft to amend AR-C 90 on review engagements. The exposure draft includes a technical correction for supplementary information that accompanies reviewed financial statements and the accountant's review report thereon. The proposed SSARS is expected to be effective upon issuance.
Auditing Standards
The Auditing Standards Board (ASB) has two exposure drafts. The first is on auditor involvement with exempt offering documents. If adopted and issued as a final standard, the proposed SAS will be codified in AU-C sec. 945 and will be effective for exempt offering documents with which the auditor is involved that are initially distributed, circulated, or submitted on or after June 15, 2018. Early application of the SAS will be permitted. The second exposure draft is on an auditor's consideration of an entity's ability to continue as a going concern. At the time the current auditing guidance on going concern was issued, the Financial Accounting Standards Board (FASB) had not issued its guidance on management's consideration of going concern. This proposed guidance would better align the AICPA with the FASB, the Governmental Accounting Standards Board (GASB), and International guidance. If adopted, the guidance will be effective