Introduction to SSARS 22
SSARS 22, Statements on Standards for Accounting and Review Services, provides guidance on compilation engagements. It outlines the standards and procedures that accountants and financial professionals must follow when performing a compilation.
The primary objective of SSARS 22 is to establish a framework for accountants to provide compilation services that are consistent with the needs of users of financial statements. This includes ensuring that financial statements are presented in accordance with the applicable financial reporting framework.
Scope and Applicability of SSARS 22
SSARS 22 applies to compilation engagements performed by accountants in public practice. It does not apply to audits or reviews of financial statements, which are governed by separate standards.
The standard also does not apply to compilations of pro forma financial information, nor does it address the needs of users of pro forma financial information. However, it does provide guidance on the compilation of financial statements that are intended for general use.
Compilation Procedures Under SSARS 22
Under SSARS 22, the accountant is required to perform certain procedures to ensure that the financial statements are presented in accordance with the applicable financial reporting framework. This includes reading the financial statements and considering whether they appear to be appropriate in form and free from obvious material errors.
The accountant must also obtain an understanding of the entity's financial reporting framework and the accounting policies adopted by management. This includes understanding the methods used to account for significant transactions and events.
Compilation Report Under SSARS 22
The compilation report is a critical component of the compilation engagement. It provides an opinion on whether the financial statements are presented fairly, in all material respects, in accordance with the applicable financial reporting framework.
The report must include a statement indicating that the compilation was performed in accordance with SSARS 22 and that the accountant has not audited or reviewed the financial statements. It must also include a statement indicating that the accountant does not express an opinion or provide any assurance on the financial statements.
Documentation and Communication Under SSARS 22
The accountant must document the compilation procedures performed and the conclusions reached. This includes documenting the understanding of the entity's financial reporting framework and the accounting policies adopted by management.
The accountant must also communicate with management regarding any significant findings or issues that arise during the compilation engagement. This includes communicating any concerns regarding the presentation of the financial statements or the application of the accounting policies.
Frequently Asked Questions
What is the purpose of SSARS 22?
The purpose of SSARS 22 is to provide guidance on compilation engagements and to establish a framework for accountants to provide compilation services.
Who does SSARS 22 apply to?
SSARS 22 applies to accountants in public practice who perform compilation engagements.
What procedures must the accountant perform under SSARS 22?
The accountant must perform procedures to ensure that the financial statements are presented in accordance with the applicable financial reporting framework.
What is the compilation report under SSARS 22?
The compilation report provides an opinion on whether the financial statements are presented fairly, in all material respects, in accordance with the applicable financial reporting framework.
What must the accountant document under SSARS 22?
The accountant must document the compilation procedures performed and the conclusions reached.
What is the significance of SSARS 22 for financial professionals?
SSARS 22 provides guidance on compilation engagements and establishes a framework for accountants to provide compilation services, which is essential for financial professionals.