SSARS

Statements on Standards for Accounting and Review Services

Standards issued by the American Institute of Certified Public Accountants (AICPA) to guide accountants who perform accounting and review services for non-public companies. Key points about SSARS:

• Purpose: The main purpose of SSARS is to establish standards and provide guidance for certified public accountants (CPAs) who prepare financial statements for their clients or perform review engagements on financial statements.
• Scope: SSARS applies to compilations and reviews of financial statements for non-public companies and other financial information, such as prospective and pro forma financial information.
• Compilation engagements: In a compilation engagement, a CPA prepares financial statements based on information provided by the client. The CPA does not provide any assurance on the financial statements but must have a general understanding of the client’s business and accounting principles.
• Review engagements: In a review engagement, a CPA performs analytical procedures and inquiries to obtain limited assurance that there are no material modifications that should be made to the financial statements for them to be per the applicable financial reporting framework.
• Independence: SSARS requires CPAs to maintain independence in fact and appearance when performing review engagements. However, independence is not required for compilation engagements.
• Reporting: SSARS provides guidance on the form and content of the CPA’s report for compilation and review engagements, including the level of assurance provided (if any) and any departures from the applicable financial reporting framework.
• Updates: SSARS is periodically updated to address changes in the accounting and business environment and to clarify existing guidance. The most recent major update was SSARS No. 25, issued in 2020, which revised the standards for preparation, compilation, and review engagements.

SSARS plays a crucial role in providing a framework for CPAs to perform accounting and review services for non-public companies. It ensures that financial statements are prepared and presented in accordance with applicable standards and that users of the financial statements are aware of the level of assurance provided by the CPA.