There are no prerequisites.

Course Description

This course from Ray Thompson explains recent changes and regulations for accountants in charge of preparing compiled, reviewed, or OCBOA statements. You'll gain an overview of the issues affecting compilation and review, using case studies to illustrate specific areas that can be confusing. Detailed guidance will be given illustrating the role of the CPA in providing a range of accounting and financial statement services.

You'll also be given direction on recent SSARSs and the most current AICPA statements regarding OCBOA statements. In the end, you'll come away with an in depth understanding of the complicated, but essential, requirements facing financial professionals in charge of preparing compilation, review, and OCBOA statements.


Ray Thompson, CBA, CFM, CMA

Dr. Ray Thompson, CBA, CFM, CMA, is an emeritus associate professor of accounting and finance at the University of Pittsburgh. He served as department head at the University of Pittsburgh at Johnstown (UPJ) campus for over 25 years. He was the associate director of UPJ’s Entrepreneurial Development Assistance Project, where he was involved in financial consulting and assisting in preparing loan proposals for small business start-ups. He has taught in graduate and undergraduate business programs in Europe, Africa, and the United States.

Ray received his BS and MS degrees in economics and systems dynamics from the University of Bradford in the United Kingdom, his MBA in accounting from Xavier University in Ohio, and his PhD in business administration from Nova University. Ray is also certified in financial management and is a certified management accountant (CMA), a certified business appraiser (CBA), and holds the accredited valuation analyst credential from the National Association of Certified Valuators and Analysts (NACVA). He recently became certified in IFRS though the Institute of Chartered Accountants in England and Wales.

Ray teaches at Western CPE conferences and produces both self-study and webcast courses as well. He also authors and conducts professional development seminars for Fortune 500 and international corporations, multinational financial institutions, state CPA societies, and CPA firms throughout the United States. In addition, Ray provides business valuation services and consults with accounting firms and sole practitioners on a range of accounting issues in the area of valuation. He’s a faculty associate member of the AICPA and the Pennsylvania Institute of Certified Public Accountants (PICPA) and a member of the Financial Reporting Faculty of ICAEW.

Course Specifics

Sep 4, 2018
There are no prerequisites.

Compliance Information

Qualifies for CA Fraud: No

Learning Objectives

Upon successful completion of this course, participants will be able to:

Chapter 1

  • Identify the users of compiled and reviewed financial statements and recognize the current standard setters and their purpose

Chapter 2

  • Recognize the SSARS hierarchy and its professional requirements
  • Identify the common elements in all compilation and review engagements, the objectives for compilation and review engagements, and responsible parties
  • Recognize the different standards of service required for preparations, compilations, reviews, and audits and their cost effectiveness
  • Specify the purpose and objectives of a compilation engagement
  • Specify the purpose and objectives of a review engagement
  • Recognize SSARS related reporting requirements and issues, including predecessor/successor communication and reporting on comparative financial statements

Chapter 3

  • Recognize some of the current issues in compilations, including engagement driven compilations
  • Recognize how reliability, independence, and reporting impact compilations and reviews
  • Identify frauds common to small businesses and the CPA's responsibilities for detecting and reporting fraud
  • Identify the requirements contained in SSARS 21, Preparation of Plain Paper Financial Statements

Chapter 4

  • Identify some of the major practice issues that CPAs encounter when applying ARSC standards including engagement and representation letters, and applicable documentation requirements
  • Specify the accountant's responsibilities for withdrawing from an engagement, changing the level of service, and the discovery of subsequent events
  • Recognize how going concern issues, GAAP departures, and other reporting issues affect the compilation and review process

Chapter 5

  • Recognize how controllership services can impact independence and identify the elements of the five hurdle approach and what must be overcome to provide a given service
  • Identify controllership and other management services that a CPA is often asked to perform

Chapter 6

  • Recognize recent developments issued by the ARSC in the Preparation, Compilation and Review Alert (CRA), citing requirements set forth in SSARS 22 and 23

Chapter 7

  • Identify the purpose of analytical procedures and recognize how analytical procedures are used in review engagements
  • Identify the components of the analytical review toolkit, their characteristics, and applicable usage

Chapter 8

  • Recognize the regulations that govern the compilation and review of personal financial statements and their applicable application, presentation, and disclosure

Chapter 9

  • Recognize the defining characteristics of OCBOA (AFRF), why OCBOA (AFRF) is used, appropriate modifications, and the components of the cash and tax basis (CTBA)
  • Recognize the display, reporting, and disclosure rules for CTBA and the AICPA FRF-SME alternative, noting similarities and differences

Table of Contents

Chapter 1 – Introduction

Learning Objectives

1.1         Introduction

A.       Accounting and Review Services Committee (ARSC)

B.       Auditing Standards Board (ASB)

C.       International Audit and Assurance Standards Board (IAASB)

Chapter 1 – Review Questions

Chapter 2 – SSARS Review

Learning Objectives

2.1         Overview

2.2         Framework and Objectives for Compilation and Review Engagements

1.       Background

2.       The Structure of an Engagement

2.3         Standards of Service: Compilation versus Review versus Audit

2.4         What is a Compilation?

2.5         What is a Review?

1.       Understand the Client’s Business and the Industry in Which it Operates

2.       Perform Analytical Procedures

3.       Make Inquiries and Conduct Other Review Procedures

4.       Obtain Client Representations

5.       Read and Consider Financial Statements

6.       Documentation

2.6         Further SSARS Reporting Issues

A.       Financial Statements that Omit Disclosures

B.       Reporting on Comparative Financial Statements

C.       Predecessor/Successor Communication

D.       Prescribed Forms

E.       AR 110 (Elements) and AR 120 (Pro Forma Financial Information)

Appendix A: Summary of Current SSARS Interpretations

Chapter 2 – Review Questions

Chapter 3 – Current Issues in Compilation and Review

Learning Objectives

3.1         Overview

3.2         SSARS No. 21: Engagement Driven Compilations

3.3         Reliability, Independence, and Reporting

3.4         The CPA’S Responsibilities for Detecting and Reporting Fraud

A.       Overview

B.       Fraud and Bookkeeping Engagements

C.       Compilation Engagements

3.5         SSARS No. 21: Preparation of (Plain Paper) Financial Statements

A.       Pro

B.       Con

Chapter 3 – Review Questions

Chapter 4 – Compilation and Review

Learning Objectives

4.1         Introduction

4.2         Communication with the Client

A.       Engagement Letters

B.       Representation Letters

C.       Documentation Requirements for a Compilation

D.       Documentation Requirements for a Review

4.3         Withdrawal from an Engagement

4.4         Changing the Level of Service: Step up and Step down

4.5         Subsequent Discovery of Events

4.6         Going Concern

4.7         GAAP Departures

4.8         Incomplete Information

4.9         Supplementary Information

4.10       Special Purpose Financial Statements

4.11       Preparing Financial Statements for Audit by Another Firm

4.12       Third Party Verification (Comfort Letters)

4.13       Questions to Consider

Chapter 4 – Review Questions

Chapter 5 – Independence and Management Services

Learning Objectives

5.1         Overview

5.2         Independence and Client Services

Step 1: Other Independence Rules

Step 2: Attest Versus Nonattest Services

Step 3: Management’s Acceptance of Responsibility

Step 4: Documentation Requirements

Step 5: Analysis of Threats and Safeguards

5.3         Controllership and Other Management Services

A.       CPAs Who Are Full-Time Controllers

B.       CPAs Holding a Position within Entity

C.       CPAs Who Are Part-Time Controllers

Chapter 5 – Review Questions

Chapter 6 – Compilation and Review Alert 2014

Learning Objectives

6.1         Introduction

6.2         SSARS No. 21: Compilations of Financial Statements

A.       Engagement Acceptance

B.       Compilation Procedures

C.       Compilation Report

6.3         SSARS No. 21: Supplementary and Required Supplementary Information

A.       Supplementary Information Accompanying the Basic Financial Statements

B.       Required Supplementary Information

6.4         SSARS Exposure Draft: Association with Financial Statements

Chapter 6 – Review Questions

Chapter 7 – Analytical Procedures

Learning Objectives

7.1         Introduction

7.2         Using Analytical Procedures in Review Engagements

7.3         The Analytical Review Toolkit

Tool #1: Scanning

Tool #2: Percent Change Analysis

Tool #3: Industry Analysis

Tool #4: Ratio Review

Tool #5: Reasonableness Tests

Tool #6: (Trend Projection) and Tool #7 Regression Analysis

Chapter 7 – Review Questions

Chapter 8 – Compilation and Review of Personal Financial Statements

Learning Objectives

8.1         Overview

8.2         SOP 82-1 [ASC 274]

A.       Basis of Presentation

B.       Statement of Financial Condition

C.       Current Value Guidelines

D.       Disclosures

8.3         SSARS and Personal Financial Statements

A.       Engagement Letters

B.       Management’s Responsibility for Internal Control

C.       Fraud and Illegal Acts

D.       OCBOA

E.       GAAP Departures

8.4         Compilation of Personal Financial Statements

8.5         Review of Personal Financial Statements

A.       Inquiries

B.       Analytical Procedures

8.6         Review Questions

Chapter 8 – Review Questions

Chapter 9 – Cash and Tax Basis Accounting

Learning Objectives

9.1         Overview

A.       Why Use OCBOA?

B.       Where to Look

9.2         Recognition and Measurement

A.       (Modified) Cash Basis

B.       Tax Basis

9.3         Display

A.       Terminology

9.4         Reporting

A.       Guidance

B.       Other Reporting Issues

9.5         Disclosure

A.       Overview

9.6 The AICPA FRF-SME Alternative

A.       Fair Value Accounting

B.       Consolidation of SPE/VIE Arrangements

C.       PP&E and Asset Impairment

D.       Intangible Assets and Goodwill

E.       Lease Accounting

F.       Related Party Transactions

G.       Accounting for Income Taxes

Chapter 9 – Review Questions

Review Question Answers and Rationales



Final Examination

Answer Sheet

Course Evaluation


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