The recently released SSARS21 Standard creates a bright line between preparing and reporting services, and is potentially the most significant non audit standard change of the past 30 years. This new standard will dramatically change how firms provide Client Accounting and BPO services, and is something many in the profession have been requesting for years. In this webcast we review how firms can advance their client accounting services based on this new standard. Firms will need to change how they describe and market their client accounting services, engage with clients, as well as deliver these services.

1. DigitalCPAWebcast
New Era for Financial Preparation Services Driven by
Major Standard Change
January 30, 2015

2. Moderator
CPA.com is a subsidiary of the AICPA
• Empowering CPAs and Businesses for the Digital
Age
Erik Asgeirsson, President and CEO, CPA.com
• Industry leader with over 20 years of experience
leading technology organizations
• Consistently recognized as one of Accounting
Today’s “Top 100 Most Influential People”
• BS Electrical Engineering, George Washington
University, and MBA in Finance, NYU Stern School
of Business

3. Guest Panelists
Michael P. Glynn, CPA, CGMA
Senior Technical Manager, Audit and Attest
Standards Group, AICPA

4. 4
ACCOUNT-ability Plus, LLC Achieving Accounting and Auditing Excellence
Alan W. Anderson
Al has over 25 years of experience in the accounting
profession. After working primarily as a partner and
National Director of Audit in the firm of McGladrey and
Pullen, LLP and with the American Institute of CPAs
as Senior Vice President of Member and Public
Interest, Al founded ACCOUNT-ability Plus
headquartered in Minneapolis.
Al’s experience in the world of auditing reaches far
and wide. This includes helping to standardize the
global audit approach of McGladrey and Pullen,
overseeing the AICPA’s technical audit and accounting
standards, including self-regulation and the CPA
examination and implementing paperless solutions.
Al represented the AICPA on –
 Financial Accounting Standards Advisory Council
(FASAC)
 Committee of Sponsoring Organizations (COSO)
 International Federation of Accountants (IFAC)
 International Innovation Network (IIN)
 Enhanced Business Reporting Consortium (EBRC)
Al also has been frequent speaker at conferences
nationally and internationally

5. Digital CPA Webcast Series –
Building a community of digital CPAs who embrace change
and the transformational effects of technology on today’s practice
• New Era For Client Accounting: Impact of
SSARS No.21
January
30th
• April 30th
• July 16th
• September 22nd
Upcoming
in 2015

6. Agenda
New Era for Client Accounting Services
Review of Section 70 - Preparation of Financial
Statements
Panel Discussion

7. NewEraforClientAccounting

8. Client Accounting vs Write-up Services
8
1. Traditional Firm Write-up
• Compiling financial statements for banks and other users
• Not necessary for firm to specialize
• Low margin usually non strategic area of the firm
2. Premium Based Client Accounting Services
• Leveraging capabilities driven by cloud computing
• Specialization is key to firm success
• Described as BPO, Back Office, Virtual Controller or
Virtual CFO
• Major growth area for firms and very strategic

9. Virtual
Controllership
Collaborative
Advisory
Services –
Virtual CFO
Write-Up
Wide Spectrum of Service Levels for Client Accounting
Business Process
Outsourcing
Advisory
Transactional
Specialize in Client Industry Verticals
 Healthcare
 Not-For-Profit
 Technology
 Professional Services
 Property Management
 Charter Schools
 Retail
 Franchises

10. 1990
2000
Today
Recalibrate Accounting Services
Today’s Opportunity
Cloud based
 Integrated
 Paperless
 Dashboards
 Real Time
Small Businesses
push work back to
firms to focus more
on their business
Role of Firms Reduced
QuickBooks introduced
to small businesses Don’t let it be client driven!

11. Changing Firm Value Proposition
Value
Automation
Today Tomorrow
Trusted
Advisor
Trusted
Advisor
Growth
Specialization
Business Insights
Commoditization of low end
Higher Margin
Low margin/fee pressures
Automation
Of Services
Transactional
Decline
Transactional
Bookkeeping

12. Need to Review Positioning & Delivery of Client Accounting
Services
Key Areas:
• Revise Positioning and description services
• Write-up & Compilation Service
• Client Accounting & BPO Services
• Value of CPA Firm
• Updating of Engagement Letters
• Updating of Service Delivery
• Legend requirement is an
OPPORTUNITY to highlight firm value

13. ReviewofSection70- Preparationof
FinancialStatements

14. Clarify Project Goals
Same as ASB’s Clarity Project Goals
Address concerns over length and complexity of standards
Make standards easier to read, understand and implement
Lead to enhancements in engagement quality
Same format and drafting guidelines
No inclusion of special considerations for smaller, less complex entities or
governmental entities
SSARS No. 21 represents the ARSC’s efforts to clarify and revise the standards for
reviews, compilations, and engagements to prepare financial statements

15. Statement on Standards for Accounting and Review
Services - SSARS No. 21
Effective for financial statements for periods on or after December 15, 2015
Early implementation is permitted
15

16. SSARS No. 21
Supersedes all existing AR sections except for
AR Section 120, Compilation of Pro Forma
Financial Information, which is expected to be
exposed for public comment in clarified format in
2015 along with a proposed standard on
assembly/compilation of prospective financial
information.
Prospective financial information is currently codified in Attest
Standards
16

17. Section 70 – Preparation of Financial
Statements
Intended to be short and easy to apply
• Only 22 requirement paragraphs and 19 application
paragraphs
Applies when the accountant is engaged to prepare f/s
but not engaged to perform an audit, review, or
compilation on those f/s
• Does not apply when the accountant has been engaged to
merely assist in preparing financial statements or when the
accountant prepares financial statements as a by-product of
another engagement

18. Section 70 – Preparation of Financial
Statements
Does not apply when the accountant prepares financial
statements:
• Solely for submission to taxing authorities,
• For inclusion in written personal financial plans prepared by the
accountant,
• In conjunction with litigation services that involve pending or
threatened legal or regulatory proceedings, or
• In conjunction with business valuation services.
Professional judgment will need to be applied as to when
the accountant is engaged to prepare financial statements.

19. Section 70 – Preparation of Financial
Statements
Does not require the accountant to consider
whether he or she is independent
Requires an engagement letter signed by both the
accountant and management/those charged with
governance
Can be applied to f/s with or without disclosures

20. Section 70 – Preparation of Financial
Statements
If the financial statements omit substantially all
disclosures – disclose the omission in the financial
statements
If the financial statements contain a known framework
departure – disclose in the financial statements
• May be on the face of the financial statements or in a note
• Do not prepare financial statements if omission of disclosures
or other known framework departures are done to mislead
users

21. Section 70 – Preparation of Financial
Statements
Report is not required – even if financial statements
are expected to be used by a third party
Requires a legend on each page of the f/s stating that
no assurance is being provided
• If management refuses or cannot include the legend, the accountant
could issue a disclaimer report, perform a compilation engagement,
or resign.
• Ensures that users are able to readily identify that the accountant is
providing no assurance with respect to the financial statements.
• Software vendors are expected to include in their software

22. Section 70 – Preparation of Financial
Statements
If the accountant is unable to include a statement
on each page of the financial statements, the
accountant is required to
• Issue a either a disclaimer that makes clear that no
assurance is provided on the financial statements or
• Perform a compilation engagement in accordance with
section 80 of SSARS No. 21.

23. Section 70 – Preparation of Financial
Statements
An example of a disclaimer :
• The accompanying financial statements of XYZ Company as
of and for the year ended December 31, 20XX, were not
subjected to an audit, review, or compilation engagement by
me (us) and, accordingly, I (we) do not express an opinion, a
conclusion, nor provide any assurance on them.
• [Signature of accounting firm or accountant, as appropriate]
• [Accountant’s city and state]
• [Date]

24. Section 70 – Preparation of Financial
Statements
When preparing financial statements in
accordance with a special purpose
framework/OCBOA, the accountant is required to
include a description of the financial reporting
framework on the face of the financial statements
or in a note to the financial statements.

25. Comparison of Compilation and Preparation
Service
Compilation Preparation
When does the standard apply? Engaged to
compile
Engaged to
prepare
Is an engagement letter required? Yes Yes
Is the accountant required to determine if he or she is
independent of the client?
Yes No
If the accountant is not independent, is that fact
required to be disclosed?
Yes N/A
Does the engagement require a report? Yes No1
May the financial statements go to users outside of
management?
Yes Yes
May the financial statements omit notes? Yes Yes
1legend required that no assurance provided.

26. Compilation and Preparation SSARSs
Results in a bright line between accounting
services and reporting services.
Accountant no longer has to be concerned about
whether the financial statements would be used
internally or by third parties.

27. PanelDiscussion

28. SSARS21: Most Significant
Non Audit Standard Change in
the Past 35 Years
28

29. Legend Requirement is an Opportunity
29
• Firms Should note not only what it is not (audit, review, or compilation)
but what it is (high quality standard based financial statement):
• Financial Statement Preparation Service Provided By XX Firm under
auspices of Professional Standards Provided By The AICPA.
• Firms need to highlight to both their clients and the key users (such as
banks) that as a CPA Firm they are providing the client accounting
service based on the AICPA Professional Standards and have professional
continuing education, professional conduct and code of ethic
requirements which differentiate them from non-CPA firms providing
similar services

30. Comments from CPAs
• Catches up to a changing world – in terms of technology and the
types of services (finance-and-accounting outsourcing, or FAO)
that CPA firms want to offer their clients
• Allows CPA firms to provide CFO/controller services without the
need to provide compilation report which is not be requesting
• Some feel it levels the playing field for CPA firms against non-CPA
firms
• Sets the stage for Client Accounting to become as significant as
audit and tax services, and will drive more firms into this area

31. Need to Re-Position Description of Services
31
• Clients don't necessary know
what they want
• Positioning of services and
value
• Differentiate your firm from
non-CPA firms

32. Need to Re-Educate Banks on Service Offerings
Change in mindset
Change in product

33. Additional Questions From Firms
1. Future for compilations?
2. Why should firms implement SSARS No. 21 early?
3. Who will be most interested in this change?
4. How does a firm handle GAAP exceptions?
5. From Attendees?
33
?

34. Closing Comments on SSARS 21 Impact
New Standard For Cloud-Based Practice Environment
Provides a bright line between accounting and reporting services
Provides opportunity for firms to highlight increased value via legend requirement
• Opportunity to build high-end, premium based client accounting service supported by
standard
High Interest Among Client Accounting and BPO Firms
• Many are early adopting
• Importance of Repositioning Write Up and Client Accounting Services
Firms and Clients have been asking for it – some for a very long time
34

35. Tools&Resources

36. Helpful Information and Resources
Dedicated ARSC Clarity page on AICPA Website at
http://www.aicpa.org/InterestAreas/FRC/Review/Pages/A
RSCClarityProject.aspx
• Will be updated frequently
Developments in Review, Compilation, and Financial
Statement Preparation Engagements – 2014/2015

37. DIGITAL CPA Conference 2015
December 7-9
Red Rock Casino, Resort & Spa –
Las Vegas
Client Advisory Services Workshops
CPA.com Blog
Slideshare.net/CPAcom

38. 38
Thank you!
#DigitalCPA