SSARS 21/preparation of financial statements

CPA performs all accounting/write-up for company. Bank reconciliations, recording of income, coding of check disbursements, amortization schedules for a/p and a/r, depreciation schedules, PREPARATION of financial statements, etc..

At this point can CPA correctly state that he/she ‘prepares’ financial statements instead of compiling them? Could not engagement letter be stated so that CPA is engaged to ‘prepare’ financial statements? If so, could a report resembling compilation letter be prepared to accompany financial statements?

Peer review hangs in the balance on this. Want to do the right thing.

Bill

I think you could do a preparation engagement. There are certain items that have to be in the engagement letter of a preparation engagement though. Make sure you have some up-to-date reference guides to go by. Also, I do not think you issue a report (similar to a compilation report) on a preparation engagement. However, I think certain things have to be noted on the financial statements, such as "no assurance" is given.

I may be wrong; hopefully someone will correct me if so. I continue to do compilations for all of my clients.

It's worth reading SSARS 21 as it is not more than a couple of pages regarding "Prepared Financials" including illustrative paragraphs what should be written.

Also you can view additional questions @ https://www.aicpa.org/interestareas/cen ... ement.aspx.