Some of the services our firm provides are governed by standards set by the American Institute of CPAs (AICPA). There are changes to some of these standards that go into effect for engagements on financial statements dated on or after December 15, 2015, and they may impact you if we provide you or your organization with financial statement preparation services or perform a review or compilation of your financial statements. We will review the changes in more detail with you but here’s a brief overview of some of the changes. These changes do not impact tax or audit engagements.
Financial Statement Preparation Services: For clients who have engaged us to prepare their financial statements, you will notice a substantial change in our deliverables. Whereas in the past, we were required to issue a report if such financial statements were expected to be used by third parties (including most boards of directors), we can now issue financial statements to you without a report. However, we will be required to indicate on each page of the financial statements that we prepared that no assurance is provided on the financial statements. Our firm name will not appear on the financial statements. We are happy to discuss with you in more detail if this is a service that may be a good fit for your organization.
Compilation of financial statements: For clients who have engaged us to perform a compilation engagement in the past, if you require a report on your financial statements (regardless of whether we prepared the financial statements), you’ll see a few changes. We’ll ask you to sign an engagement letter that includes some changes designed to clarify responsibilities. The compilation report is also changing to make it easier for readers to distinguish it from a review or audit report.
Review of financial statements: For clients who have engaged us to perform a review of financial statements, there are also a few changes. We’ll ask you to sign an engagement letter that includes some changes designed to more clearly outline responsibilities. The review report is changing slightly and there may be some other changes throughout the course of the review engagement.
This is just a quick synopsis of some topics we will be discussing with you in more detail if you are impacted by the changes outlined above. We believe that these changes will allow us to better serve you by offering the option of formalizing our accounting assistance through the new preparation service and by providing another opportunity to discuss services to best meet your needs. Until then, if you have questions, please feel free to contact us any time at (951) 801-4628.