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Plain Paper Statements: Did SSARS No. 8 Meet Its Purpose?
Brian Patrick Green,
University of Michigan - Dearborn
Alan Reinstein, Wayne State University
Cathleen L Miller, Wayne State University
ABSTRACT. Standards for Accounting and Review Services (SSARS) Number (No.) 1, “Compilations and Review Services,” (AICPA 1979) provides guidance for public accountants associated with unaudited financial statements. SSARS No. 8, “Amendment to SSARS No. 1, Compilation and Review of Financial Statements,” (2000) extends this guidance to plain paper statements. Unlike traditional compilations, plain paper statements are intended only for the use of informed members of management. To examine the effects of SSARS No. 8, we surveyed practicing CPAs and sophisticated financial statement users to measure their perceptions of what constitute “submitted financial statements,” “third parties,” “informed members of management” and concerns described in SSARS No. 8 comment letters. We find that even CPAs somewhat familiar with SSARS No. 8, and bankers do not fully understand the concepts of SSARS No. 8. We suggest the need for more education to increase the effectiveness of SSARS No. 8.
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