AICPA harmonizes review standard with int'l and GAAS rules
The American Institute of CPAs’ Accounting and Review Services Committee has issued a new standard for accounting and review services as part of an effort to align its standards with both international standards and generally accepted auditing standards.
The committee released Statement on Standards for Accounting and Review Services No. 25, "Materiality in a Review of Financial Statements and Adverse Conclusions, on Tuesday. It converges AR-C section 90, Review of Financial Statements," with International Standard for Review Engagements 2400 (Revised), "Engagements to Review Historical Financial Statements." SSARS No. 25 also aligns some concepts with GAAS.
The AICPA pointed out that even though there are significant differences between an audit engagement and an engagement performed in accordance with SSARS, there are certain concepts, such as materiality, that are consistent regardless of the level of services performed on the financial statements.
“By issuing SSARS 25, it shows our commitment to update these standards to be more aligned with our auditing standards, where appropriate, and the international standards for review engagements,” said AICPA chief auditor Bob Dohrer, in a statement. “While this standard may not result in any significant change in practice for CPAs that have been performing their reviews appropriately, it will decrease diversity in practice.”
The Accounting and Review Services Committee believes it’s important for the SSARS literature to be as closely converged with the international review standard as possible to help accountants perform and report on engagements in accordance with both sets of standards and reduce any confusion about the level of assurance.
SSARS No. 25 takes effect for engagements performed in accordance with SSARS on financial statements for periods ending on or after Dec. 15, 2021, but early implementation is allowed.