Finalizing 2014 Part II: 2014 Illustrative Financial Statements

Continuing on our series of finalizing 2014, (Part 1, posted last week) a few more changes have been made to be aware of. The SEC and Public Company Accounting Oversight Board (PCAOB) have recently made comments to remind issuers and audit firms of certain independence requirements and provided their views on the scope of services which can be considered as assistance in preparation of financial statements.  Non-issuers subject to SEC/PCAOB independence rules include banks subject to FDICIA.

The following are examples of services which can be viewed as assistance in preparation of financial statements:

• Provide to the audit client financial statement templates or disclosure examples that are not publicly available for use by the client when drafting their financial statements.
• Prepare, or assist clients during their preparation of, draft financial statements.
• Prepare, or assist clients during their preparation of, supporting schedules required by SEC rules.
• Provide typing or word processing services relative to the client’s financial statements including updates to layout, editing, or formatting
• Assemble of the client’s financial statements by:

o   Printing or producing copies of financial statements for client use
o   Stapling or binding financial statements prepared by the client

• Adding audit report to client prepared financial statements then preparing a .pdf document for client use
• Prepare source data that underlie the financial statements, for example:

o   Calculate income tax accruals including deferred income taxes
o   Maintain fixed asset depreciation schedules or computations
o   Perform asset impairment calculations
o   Assist in determination of accounting estimates

Since the Alert indicates financial statement templates can be provided to audit clients if they are publicly available, Crowe Horwath, LLP has posted illustrative financial statements  which you can viewhere.

Download the 2014 Illustrative Financial Statements written by our friends at Crowe Horwath.You can also contact Peter Wiese, Assurance Partner at Crowe Horwath: (916) 847-5019, peter.wiese@crowehorwath.com or via LinkedIn.

Revisit Finalizing 2014, Part I.