PREPARING FINANCIAL STATEMENTS

Section 70 SSARS 21

What should thefinancial statements

look like?

Basis of accounting

Any of the following bases ofaccounting can be used:

1. Generally accepted accounting principles2. Cash basis3. Tax basis4. Regulatory basis5. Contractual basis6. Other basis (e.g., AICPA FRF for SMEs)

Note: On the following slides, the words "not required" meanSSARS 21 does not require theitem, but it is permissible toinclude.

Minimum requirements for compliancewith preparation engagement

Financial statements must includeeither:

1. a disclaimer, or2. the words "no assurance is provided" oneach financial statement page

Disclaimer example1Disclaimer not required to be on letterhead

Title and salutation are not required

Disclaimer example1

Disclaimer reference not required

2 "No assurance is provided" example

When this option is used, a disclaimer paragraph (seeoption 1 above) is not added to the financial statements .

This wording can be added at the bottom of each page

Where should a departure from theapplicable basis of accounting be shown?

Disclose departures either:-on the face of the financial statements, or

-in a note

Sample disclosure of gaap departure: omission of cash flow statement

What can be omitted?

1. Cash flow statement2. Substantially all disclosures

Disclose omissions either:-on the face of the financial statements, or

-in a note

Sample disclosure of omissions

Sample disclosure of omissions

Selected disclosure is permissible

and receiveSubscribe

sample financial statementsand engagement letter