Post on 06-Aug-2015
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
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