Preparation of Financial Statements: Clarification to the Applicability of AR-C 70

As we reported in our April 10th Alert, the AICPA Accounting and Review Services Committee (ARSC) issued Statement on Standards for Accounting and Review Services (SSARS) No. 27 (SSARS 27), Applicability of AR-C Section 70 to Financial Statements Prepared as Part of a Consulting Services Engagement, to clarify the applicability of AR-C 70, Preparation of Financial Statements, in AICPA Professional Standards to explicitly exclude financial statements prepared as part of a consulting services engagement performed in accordance with Consulting Services (CS) 100, Consulting Services: Definitions and Standards, from those engagements in which AR-C 70 is required to be applied. CPEA members who perform client advisory services or some may know as client accounting services (CAS) may find this change to the professional literature impactful to their engagements and responsive to concerns that the current preparation standard (AR-C 70) does not align well with the advisory role many practitioners play today, for example when acting as outsourced CFOs or controllers. SSARS 27 provides a clearer framework to distinguish preparation services from consulting engagements.