SSARS 21 and Printing Financial Statements from Quickbooks

Is AR-C 70, Preparation of Financial Statements, triggered by printing financial statements from Quickbooks?

Many CPAs are still asking if printing financial statements from Quickbooks triggers a requirement to follow SSARS 21. Previously, if a CPA created and submitted financial statements to a client, he had to issue a compilation report. Hear the answer in this video. 

Also, we’ll take a look at whether you as a CPA can issue monthly financial statements in accordance with SSARS 21 and then perform an audit for the same client at the end of the year. 

Note: This video was created in 2015, but the information is still current. SSARS 23 does not alter the answers.

Check out my SSARS 21 book on Amazon.com by clicking here

How to Present Supplementary Information in Compilation and Preparation Engagements

Supplementary information can be added to basic financial statements

Are you wondering how to present supplementary information in compilation and preparation engagements? What supplementary information (SI) should be included? How does the accountant define his or her responsibility for SI?

Often accountants, at the request of their clients, add supplementary information to the financial statements. Such information is never required (to be in compliance with a reporting framework) but may be useful.

supplementary information: compilation and preparation engagements

Picture is courtesy of Dollar Photo

You can think of financials with supplementary information in this manner:

Financial statements – Required – The jeep in the picture above

Supplementary Information – Not required – The camper

You’re not going anywhere without a vehicle (it’s required). And your camper (not required) is no good without an automobile to pull it. Kind of a silly analogy, I know, but maybe it will help you remember.

I normally add a divider page between the financial statements and supplementary information (though such as page is not required); the divider page simply says “Supplementary Information” and nothing else.

SSARS 21 defines supplementary information as follows:

Information presented outside the basic financial statements, excluding required supplementary information, that is not considered necessary for the financial statements to be fairly presented in accordance with the applicable financial reporting framework.

The Most Efficient Way to Issue Financial Statements

SSARS 21 Tax Basis Financial Statements

What is the most efficient way to issue financial statements?

Tax basis financial statements without disclosure, using the Preparation of Financial Statements option (Section 70 of SSARS 21).

efficient way to issue financial statements

This answer assumes you are preparing financial statements in conjunction with a tax return and that those financial statements are issued separately—apart from the tax return—to your client.

Episode 6 – SSARS 21 Compilation Engagement Questions & Answers

Digging deeper into how compilations have changed

Today we take a look at compilation engagement issues such as:

  • What does the new compilation report look like?
  • Should a compilation report have a title and a salutation?
  • Should the financial statement pages refer to the compilation report?
  • How should a departure from the applicable reporting framework be communicated?
  • How should a going concern issue be communicated?
  • How does the use of the tax basis of accounting alter the compilation report?
  • What are the minimum work paper requirements?
  • Are you required to make inquiries in a compilation engagement?

Episode 5 – Compilation Engagements Using SSARS 21

Here are the basics to using the new compilation standard

This week we look at how compilation engagements have changed from SSARS 19 to SSARS 21. We also discuss what compilation engagement elements have not changed. We conclude by providing an overview of the objectives and requirements of the new compilation standard.

An overview of the podcast is as follows:

  • What are the key changes in compilation engagements?
  • What has not changed?
  • What are the objectives of a compilation?
  • What procedures must be performed?

Episode 4 – Questions and Answers for the New SSARS 21 Preparation of Financial Statements Standard

Here are answers to your most pressing AR-C 70 questions

CPAs have had many questions about the use of AR-70, Preparation of Financial Statements. Those questions include:

When is the standard applicable?

What work papers must I retain?

Is an engagement letter required?

What should the preparation report look like?

Should I include a disclaimer page?

How do I communicate departures from the applicable basis of accounting?

Can I add supplementary information?

Can AR-C 70 be used in reference to prescribed forms?

Today we answer your most pressing questions about using the SSARS 21 preparation standard.

How to Apply SSARS 21 to Prescribed Forms

CPAs have two options in applying SSARS 21 to prescribed forms

My new SSARS 21 book, Preparation of Financial Statements and Compilation Engagements, will soon be available on Amazon.com.

If you prefer to watch video, click the Vimeo presentation below.

If you prefer to view slides (without watching the video), see below.