AICPA Accounting and Review Services Committee Issues Letter

AICPA Accounting and Review Services Committee Issues Letter

By Ira M. Talbi

The American Institute of CPAs’ Accounting and Review Services Committee (ARSC) in September issued a revised management representation letter for review engagements.

Changes to the representation letter were necessitated by the new requirements in Statement on Standards for Accounting and Review Services (SSARS) 10, Performance of Review Engagements, dealing with fraud on review engagements.

The new representations include the following language:

“We acknowledge our responsibility to prevent and detect fraud.”
“We have no knowledge of any fraud or suspected fraud affecting the entity involving management or others where the fraud could have a material effect on the financial statements, including any communications received from employees, former employees or others.”

SSARS 10 is effective for reviews of financial statements for periods ending on or after Dec. 15, 2004.

The illustrative revised representation letter may be found at www.aicpa.org/members/div/auditstd/Revision_of_Appendix_F.htm.

Ira M. Talbi, CPA, a partner with Polakoff & Michaelson, CPA, P.C., in Manhattan, is chair of the Society’s Accounting and Review Services Committee.