COMPILATION CHANGES TO SSARS 8 FINALIZED.

The AICPAs Accounting and Review Services Committee has issued the final version of SSARS No. 8, Amendment to SSARS No. 1, Compilation and Review of Financial Statements, effective for financial statements submitted after Dec. 31, 2000.

SSARS 8 will fundamentally change the way that accountants view the compilation engagement by giving them a new communication option when preparing financial statements that are not expected to be used by a third party. An accountant in this situation may submit financial statements without a standard compilation report as long as the accountant documents an understanding with the client. This documentation can take the form of an engagement letter, preferably signed by management, regarding the services to be performed and the limitations on the use of those financial statements.

SSARS 8 defines third parties to include everyone "except for members of management who are knowledgeable about the nature of the procedures applied and the basis of accounting and assumptions used in the preparation of the financial statements."

SSARS 8 also revises the definition of the term "submission" to "presenting to a client or third parties financial statements that the accountant has prepared either manually or through the use of computer software."

SSARS 8 will be available for a limited-time free trial period at http://www.cpaweb.org in the AICPA Professional Literature section, under What's New. It also is available for purchase from the AICPA, by calling [phone].