Internal-use only questionnaire examined.

At its May meeting, the accounting and review services committee (ARSC) discussed responses to a questionnaire it had sent to supporters of its proposed Statement on Standards for Accounting and Review Services (SSARS), Assembly of Financial Statements for Internal Use Only. This issue has long been contentious (see In My Opinion, JofA, Apr. 95, page 83-84, and Letters, Sept.95 and Dec. 95, pages 12 and 10, respectively), and no one is expecting a final statement any time soon. However, the questionnaire responses did help the committee focus on some practice problems and will figure in any future decision to revise and reexpose the exposure draft, issue some type of interpretation or amendment of SSARS or scrap the ED entirely.

"We realized a lot of the problems were educational," said ARSC chairwoman Wanda Lorenz. CPAs were often unsure about the standards, and ARSC acknowledged the need to address some issues in more detail. Lorenz cited the following concerns as needing particular attention:

* Many CPAs do not know there are options under existing standards that would allow them to provide timely and cost-effective compilation services to their clients, such as financial statements that omit substantially all disclosures and statements prepared using a comprehensive basis of accounting other than generally accepted accounting principles.

* Peer reviewers sometimes require more documentation than professional standards do. ARSC is addressing this in conjunction with the American Institute of CPAs practice monitoring division.

* Many practitioners are violating the spirit, although not the letter, of SSARS no. 1, Compilation and Review of Financial Statements, by creating computer-generated financial statements, but allowing clients to push the button that actually prints the statements. Clients, therefore, and not the CPAs, have "generated" the statements, and the CPA does not perform the required compilations. ARSC wants to clarify SSARS no. 1 to end this practice.

* There is confusion about the applicability of SSARS when CPAs serve as controllers for their clients; ARSC hopes to resolve this soon.

"We need to study our comment letters and questionnaire responses before we proceed with this ED," said Lorenz. "The questionnaire, with other considerations, may make the ED obsolete. But we need to have some sort of amendment to SSARS no. 1, particularly addressing the issue of submission. ARSC also is preparing a series of questions and answers to prevent misconceptions about SSARS, which eventually may take the form of an amendment to SSARS no. 1."