The CPA Journal
With the issuance of Statement on Standards for Accounting and Review Services (SSARS) 10, Performance of Review Engagements, which is effective for review engagements for periods ending on or after Dec 15, 2004, the AICPA Accounting and Review Services Committee requires accountants performing review engagements to make inquiries regarding fraud. Furthermore, the management representation letter must address fraud. The authors reviewed the comment letters that the AICPA received in response to the exposure draft for SSARS 10 and conducted a survey of practitioners after the statement was issued. SSARS 10 amends SSARS 1, Compilation and Review of Financial Statements, primarily by expanding inquiries during review engagements to include fraud and by requiring that the management representation letter address fraud. Review engagements provide limited, not positive, assurance. While additional inquiries and disclosures in management's representation letter should be relatively easy to incorporate, the authors could find no substantive reasons for these procedures to be considered necessary.