SSARS 19 Changes and Sample Compilation Report Wording

SSARS 19 Changes and Sample Compilation Report Wording

The Statement on Standards for Accounting and Review Services no. 19 (SSARS 19), Compilation and Review Engagements includes some major changes for Certified Public Accountants (CPAs) who perform compilations and reviews.  One change is the wording for compilation and review reports along with new documentation requirements (including engagement letters) and other changes.

New Wording for Compilation and  Review Reports

If you are a CPA who performs compilations and reviews, you will need to update the reports to reflect the new SSARS 19 wording.  Using Intuit Statement Writer 2011 it is easy to modify the wording for a compilation (or review) report and save the revised report as a template for reuse in the future or for other clients.  I created a new course for Intuit Academy, “Intuit Statement Writer 2011 – Your Financial Statement Solution” which includes details of exactly how to modify the compilation (or review) report for the new SSARS 19 wording and save it as a template for reuse.  The course also includes detailed examples of how to prepare three different types of statements and reports:

  • Example 1: Financial Statements with Compilation Report
  • Example 2: Non Profit Organization
  • Example 3: Financial Statements and charts/graphs for Management

Click here for a link to the course. You can watch the web seminar, get free CPE if you need it and download the PDF course manual to use as a reference.   I wrote this blog post to provide an overview of the new features in Intuit Statement Writer 2011.

Here is an example of a compilation report with the new SSARS 19 wording for a report prepared on the income tax basis where the CPA is not independent:


Accountant’s Compilation Report

To the Board of Directors


«Client_City», «Client_State»

I (We) have compiled the accompanying statement of assets, liabilities, and equity — income tax basis of  «Client_Company_Name» (a corporation) as of «Report_Date», and the related statements of  revenues, expenses and retained earnings–income tax basis for the  year then ended.  I (We) have not audited or reviewed the accompanying financial statements and, accordingly, do no express an opinion or provide any assurance about whether the financial statements are in accordance with the income tax basis of accounting.

Management is (The owners are) responsible for the preparation and fair presentation of the financial statements in accordance with the income tax basis of accounting and for designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of the financial statements.

My (Our) responsibility is to conduct the compilation in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. The objective of a compilation is to assist management (the owners) in presenting financial information in the form of financial statements without undertaking to obtain or provide any assurance that there are no material modifications that should be made to the financial statements.

Management has (The owners have) elected to omit substantially all of the disclosures ordinarily included in financial statements presented in accordance with the tax basis of accounting. If the omitted disclosures were included in the financial statements, they might influence the user’s conclusions about the Company’s assets, liabilities, equity, revenues, and expenses. Accordingly, these financial statements are not designed for those who are not informed about such matters.

I am (we are) not independent with XYZ Company.


Firm’s Signature


This is only for reports of financial statements for periods ending after December 15, 2010.  The actual wording of the compilation report should be modified as needed for the particular engagement.  This is merely for illustration purposes.  Comparison charts of the wording for the previous compilation (or review) report vs. the new wording is provided by The Journal of Accountancy here.

Documentation Requirements and Other Changes

Changes required to comply with SSARS 19 are discussed in a Journal of Accountancy article.  The article provides details of the changes and requirements of SSARS 19 and how it impacts compilation and review engagements.  According to the article, changes for compilation engagements include the following:

  • Requirement to obtain a written understanding (for example, an engagement letter) for all compilation engagements.
  • Modified documentation requirements.
  • Allows accountants to disclose a description of the reasons for the lack of independence.

The Attestation Update  — A&A for CPAs blog has several posts about the SSARS 19 documentation requirements for compilation and reviews.  I would encourage you to read the posts if you need to comply with SSARS 19.  It is very informative and helpful to understanding and complying with SSARS 19.

Special thanks to Paul Carlson for his assistance with this post.

26 thoughts on “SSARS 19 Changes and Sample Compilation Report Wording

  1. Lee Janovitz

    I prepared a compilation report with the standard language the financial company wants that the statements are in accordance with GAAP, obviously in a standard compilation report I cannot. They stated that the have received many compilation reports with the wording in there, am I missing something?

  2. Allie

    Well we are doing a review. So the financial statements are based upon GAAP. I contacted the AICPA and they said partnership. However, the code section they referenced did not really say anything about s-corp. But I guess since that is what they said, that is what I will go with.

  3. Allie

    If a company is an LLC but elects S-Corporation status, should the independent accountant’s review report and all the financial statements be formatted as a partnership or as an S-corporation. The PPC books do not distinguish this specific example.

    1. Michelle Long Post author

      Good question & I’m not sure of the answer. However, the election of S Corp status is for tax purposes right? So, would the financial statements be on the tax basis or not? Contact the AICPA for guidance.

  4. William Buffington

    I am looking for a sample footnote on income taxes for a non profit firm that has income taxes due to UBI. This is a compilation.

  5. Oral

    I’m looking for a sample of a compilation report which treats to a partnership. Also to understand the titles used on the ‘statement of financial position’ and the ‘statement of comprehensive income’ as it relates to partnerships.

  6. Mark Todd

    Since the basis of accounting is not described in the notes (i.e., disclosures have been omitted), doesn’t the description of the OCBOA need to be disclosed in the report?

    1. Michelle Long Post author

      Yes you should disclose the accounting basis in the report. If you notice in the sample, in the first paragraph it says income tax basis.

  7. Laura

    I am creating a compilation for a partnership which recently made a 754 election. Since the compilation letter says that the financial statements are on the income tax basis, but the 754 election is not reflected anywhere in the books, as it shouldn’t, is the compilation still income tax basis if I don’t say anything about the 754 in the letter? I have been unable to find any sample compilation letters that address this issue. Thank you in advance for any advice you might have.

  8. Gerald Meloni

    I see that you mentioned that at the very top of your post, so I apologize if I’m out of line. Still, there are quite a few non-CPAs getting cease and desist orders from the State Board. I’m sure it is a headache that can easily be avoided.

  9. Gerald Meloni

    It should be noted that the language used in the compilation report is limited to use only by licensed CPAs. I know there are a lot of non-CPAs who read your articles, Michelle, and the Texas State Board has really stepped up its activity concerning the use of titles and language that is limited only to CPAs licensed in Texas. Am I wrong about that? I just want to save some readers from unnessarily getting into trouble.

    1. Michelle Long Post author

      Thank you for the reminder Gerald. In the first paragraph, I mention that it is for CPAs who perform compilations and reviews, but it doesn’t help to emphasize it again. You’re right, Texas and some other states have strict rules about who can call themselves an accountant, etc. People should check with their own State Board of Accountancy to ensure they comply with the rules in their state.

  10. Richard

    Can you provide me a sample of a compiled financial along with notes. Thanks

    1. Michelle Long Post author

      Richard – Financial reports and notes will vary depending on the entity type, industry and their specific financials. You can look at various companies 10-Q or annual report to see different financial statements and footnotes. I think PPC (or the AIPCA) has some publications to help with reporting and footnotes.

  11. Lanette Conley Shaw

    In the past our “S” Corporation compilation reports have concluded with a paragraph –

    “The Company, with consent of it’s stockholder, has elected under the Internal Revenue Code to be an S Corporation. In lieu of corporate income taxes, the shareholders of an S corporation are taxed on their proportionate share of the company’s taxable income. Therefore, no provision or benefit for federal or state income taxes has been included in these financial statements.”

    I don’t see this paragraph on any sample reports. I am not sure of where this came from but it has been part of our reports for years and years. Do you know if this is an optional paragraph? Or is it outdated and obsolete?


    1. Michelle Long Post author

      Lanette I’m not sure. I would suggest you contact the AICPA — they should be able to provide you with an answer. Or, the PPC guides usually have guidance if you have it.

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  13. Fay Uraynar

    Looks good, thank Michelle. Just a small addition:
    Previous Compilation Report – Title Not required
    New Compilation Report – The following Title required: Accountant’s Compilation Report