By Soyoung Ho
The AICPA on December 5, 2019, published revised attestation standards that are intended to give accountants more flexibility when performing certain limited assurance procedures.
Statements on Standards for Attestation Engagements (SSAE) No. 19, Agreed-Upon Procedures Engagements , supersedes SSAE No. 18AT-C section 215, “Agreed-Upon Procedures Engagements.”
SSAE No. 19 also amends SSAE No. 18AT-C section 105, “Concepts Common to All Attestation Engagements.”
In particular, the AICPA said that SSAE No. 19 provides flexibility when performing Agreed-Upon Procedures (AUPs) engagements.
Most significantly, the revised standard will allow an accountant to report on the subject matter—which is the information that a financial professional or accountant has to measure or evaluate—without obtaining a written assertion that the subject matter complies with an underlying criterion, such as a law or regulation, from the party that is responsible for the subject matter.
The attestation standard can be applied to many types of subject matter, such as a statement about greenhouse gas emissions or the effectiveness of the controls for the security of a system.
With some engagements, the responsible party may be the client, but for other engagements the responsible party is essentially the person or group that provides the accountant with a written assertion about the subject matter.
The AICPA believes it is necessary to give accountants flexibility when examining or reviewing certain documents if clients cannot appropriately measure or evaluate them. In some cases, the responsible party for the subject matter may not be readily identifiable.
The revised standards also:
- Allow procedures to be developed over the course of the engagement;
- Allow the practitioner to develop or assist in developing the procedures;
- No longer require intended users to take responsibility for the sufficiency of the procedures and instead requires the engaging party to simply acknowledge the appropriateness of the procedures prior to the issuance of the practitioner’s report; and
- Permit the practitioner to issue a general-use report.
“In today’s increasingly complex business environment, there is a great and apparent need for auditors’ expertise in rapidly evolving subject matters,” AICPA Chief Auditor Bob Dohrer said in a statement. “By allowing the practitioner to assist in developing procedures, not requiring an assertion by a responsible party and permitting general-use reports, the agreed-upon procedures services delivers enhanced value and relevance to report users.”
SSAE No. 19 is effective for AUPs dated on or after July 15, 2021. Early implementation is permitted.
The standards are based on a proposal the AICPA’s Auditing Standards Board (ASB) published in July 2018 in ED: Proposed Statement on Standards for Attestation Engagements, Revisions to Statement on Standards for Attestation Engagements No. 18: Clarification and Recodification, which proposed to supersede AT-C Section 105, AT-C Section 205, “Examination Engagements,” AT-C Section 210, “Review Engagements,” and AT-C Section 215.
But the ASB focused on first completing revisions specific to AUPs. The board will review proposed drafts on AT-C Sections 205 and 210 at future meetings.
This article originally appeared in the December 6, 2019 edition of Accounting & Compliance Alert, available on Checkpoint.
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