Alert E-Book

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Serie: AICPA
• Sprache: Englisch

Seitenzahl: 74

Veröffentlichungsjahr: 2018

Beschreibung

This annual Alert covers the latest developments in the preparation, compilation and review engagements, including current exposure drafts from Accounting and Review Services Committee (ARSC), and common deficiencies identified during peer reviews. Reviewed by ARSC chair, it also addresses the latest and emerging practice issues, and provides valuable information regarding accounting and reporting developments. Key benefits of this title include: * Discussion of two new exposure drafts. * Current practice issues in SSARS engagements. * Ethics updates. * Peer review common findings. * Additional SSARS engagement resources

Leseprobe

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 ManagerProduct Management and Development—Public Accounting

Mike Glynn Senior ManagerAudit 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].

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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

Guide

Cover

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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 in advance of the engagement. This alert discusses recent Statements on Standards for Accounting and Review Services (SSARSs) developments, addresses current and emerging practice issues, and provides valuable information regarding accounting and reporting developments. You should refer to the full text of pronouncements addressing preparation, compilation, and review engagements, as well as the full text of any rules or publications discussed in this alert. For developing issues that may have a significant impact on preparation, compilation, and review engagements in the near future, the "On the Horizon" section provides information on these topics, including guidance that either has been issued but is not yet effective or is in a developmental stage.

Economic Developments

The Current Economy

.02 Economic conditions facing the industry in which an entity operates, such as interest rates, availability of credit, consumer confidence, overall economic expansion or contraction, inflation, and labor market conditions, are likely to have an effect on an entity’s business and, therefore, its financial statements.

.03 During 2016 and into 2017, the U.S. economy continued to recover. The S&P 500 and the Dow Jones Industrial Average both reached all-time highs during 2017. The Chicago Board Options Exchange Volatility Index (VIX) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock option prices and is considered by many to indicate investor sentiment, market volatility, and the best gauge of fear in the market. The VIX continued to show an overall decline during the end of 2016 and into 2017. During that time, prices ranged from 14.40 to 9.36. The volatility shows there is still some uncertainty; however, the continued downward trend shows that investors believe the economy and market are improving.

Key Economic Indicators

.04 The following key economic indicators reaffirm the recovery of the economy during the end of 2016 and into 2017: gross domestic product (GDP), unemployment, and the federal fund rate. The GDP measures output of goods and services by labor and property within the United States. It increases as the economy grows and decreases as it slows. According to the Bureau of Economic Analysis, real GDP increased at an annual rate of 2.6 percent in the second quarter of 2017, based on the advance estimate (first estimate). The increase in real GDP in the second quarter has been attributed to positive contributions from personal consumption expenditures, nonresidential fixed investment, exports, and federal government spending that were partially offset by negative contributions from private residential fixed investments, private inventory investment, and state and local government spending.

.05 From July 2016 to July 2017, the unemployment rate fluctuated between 4.9 percent and 4.3 percent. A rate of 4.9 percent represents approximately 87.4 million people who are unemployed. During that same time period, the number of long-term unemployed (those jobless for 27 weeks or more) was steady. According to the Bureau of Labor Statistics, the number of people employed part-time for economic reasons decreased to 5.3 million during the second quarter of 2017. Together, these statistics illustrate the continued improvement in the economy.

.06 The Board of Governors of the Federal Reserve System (Federal Reserve) increased the target for the federal funds rate in June of 2017 to 1 percent. This was the second rate increase during 2017 after keeping the rate at .5 percent for over a year.

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

.07 The Center for Plain English Accounting (CPEA) is the AICPA’s national audit and accounting resource center, available exclusively to members of the Private Companies Practice Section. The CPEA assists member firms in understanding and implementing accounting, auditing, review, compilation, and quality control standards by sharing technical advice and guidance. The CPEA’s straight-forward and clear style of writing and speaking gives practitioners the opportunity to understand the applicability of the professional literature when they are preparing financial statements and when they are auditing, reviewing, and compiling those financial statements.

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