Alert: Developments in Preparation, Compilation, and Review Engagements, 2017/18

Notice to Readers

This 2017/18 edition of the Alert Developments in Preparation, Compilation, and Review Engagements (alert) replaces the AICPA Alert Developments in Preparation, Compilation, and Review Engagements—2016/17.

This alert is intended to provide accountants with an update on recent practice issues and professional standards that affect preparation, compilation, and review engagements. This alert also can be used by an entity’s internal management to address areas of concern.

This publication is an other preparation, compilation, and review publication, as defined in paragraph .07 of AR-C section 60, General Principles for Engagements Performed in Accordance With Statements on Standards for Accounting and Review Services (AICPA, Professional Standards). Other preparation, compilation, and review publications have no authoritative status; however, they may help the accountant understand and apply the Statements on Standards for Accounting and Review Services.

In applying the guidance included in an other preparation, compilation, and review publication, the accountant should, using professional judgment, assess the relevance and appropriateness of such guidance to the circumstances of the engagement, as appropriate. The guidance in this document has been reviewed by the AICPA Audit and Attest Standards staff, and the accountant may presume that it is appropriate.

This document has not been approved, disapproved, or otherwise acted on by a senior committee of the AICPA.

Recognition

Reviewers

AICPA Accounting and Review Services Committee

Mike Fleming, Chair

The AICPA gratefully acknowledges those members of the Accounting and Review Services Committee and the AICPA Technical Issues Committee, who helped identify the interest areas for inclusion in this alert.

AICPA Staff

Weiwei Tang

Manager

Product Management and Development—Public Accounting

Mike Glynn

Senior Manager

Audit and Attest Standards

Staff Liaison, Accounting and Review Services Committee

Feedback

This alert is published annually. As you encounter issues that you believe warrant discussion in next year’s alert, please feel free to share them with us. Any other comments you have about the alert also would be appreciated. You may email these comments to a&[email protected].

__________________________

TABLE OF CONTENTS

Developments in Preparation, Compilation, and Review Engagements—2017/18

How This Alert Helps You

Economic Developments

The Current Economy

Key Economic Indicators

Frequently Asked Questions and Answers From the Center for Plain English Accounting

Recent AICPA Independence and Ethics Developments

The Revised Code of Professional Conduct

AICPA Conceptual Frameworks

New Hosting Services Interpretation

Proposed New Ethics Interpretations and Revised Defined Terms

New FAQs

Current Practice Issues

Consideration of Materiality in a Review Engagement

Going Concern

Restatements

Preparation Engagement When in Public Practice and Providing Certain Consulting Services

Preparation of Financial Statements Prior to Review or Audit by Another Accountant

Application of SSARSs to Engagements for Estates and Trusts

Preparation and Compilation of Prospective Financial Information

Don’t Let Scope Creep Lead You Out of Bounds

Peer Review of SSARSs Engagements

Common Peer Review Findings—Compilations

Common Peer Review Findings—Reviews

Other Common Peer Review Findings

Recent FASB Activities

Revenue Recognition Standards

Restricted Cash

Consolidation

AICPA Financial Reporting Framework for Small- and Medium-Sized Entities

Alternatives to U.S. GAAP in Light of the New Revenue Recognition and Leases Standards

The FRF for SMEs Alternative

FRF for SMEs Approach to Revenue Recognition and Leases

Recent Academic Research

Considering the FRF for SMEs Framework for Your Clients

On the Horizon

Exposure Draft of Proposed Statement on Standards for Attestation Engagements, Selected Procedures

The ASB’s Project to Revise the Attestation Literature to Permit Non-Assertion-Based Examinations and Reviews

Exposure Draft of Proposed SSARS, Omnibus Statement on Standards for Accounting and Review Services—2018

Other Items on the ARSC’s Current Agenda

Upcoming ARSC Meetings

Resource Central

Publications

The Engagement Letter: Best Practices and Examples

FRF for SMEs Toolkits

Decision Tool for Adopting the FRF for SMEs Framework

Continuing Professional Education

Member Service Center

Hotlines

The AICPA CPEA

AICPA Online Professional Library: Accounting and Auditing Literature

Practice Aid Accounting and Financial Reporting Guidelines for Cash- and Tax-Basis Financial Statements

Financial Reporting Center of AICPA.org

Appendix—Additional Internet Resources

EULA

__________________________

How This Alert Helps You

.01 This alert (alert) helps you plan and perform your preparation, compilation, and review engagements and can also be used by an entity’s internal management to plan and prepare