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Statements on Standards for Accounting and Review Services (SSARS)

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What is the definition of Statements on Standards for Accounting and Review Services (SSARS)?

Statements issued by the American Institute of Certified Public Accountants (AICPA) that provide guidelines for accountants in the preparation of unaudited financial statements and related disclosures, specifically focusing on compilation and review services.

Using Statements on Standards for Accounting and Review Services (SSARS) in an Example

Under the SSARS, when an accountant is engaged to compile a company's financial statements, the accountant is not required to verify the accuracy or completeness of the information provided by the company's management. However, the accountant must ensure that the financial statements are free of obvious material errors and conform to generally accepted accounting principles.

Using Statements on Standards for Accounting and Review Services (SSARS) in a sentence

During the meeting, the accountant mentioned that according to the SSARS, he would perform a review of the financial statements, which includes primarily applying analytical procedures to the financial data and making inquiries of company management.

Related Terms

S Corporation

A type of corporation that elects to pass corporate income, losses, deductions, and credits through to its shareholders for federal tax purposes. Shareholders of S corporations report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates, allowing S corporations to avoid double taxation on the corporate income.

SAS

Statements issued by the Accounting Standards Board of the American Institute of Certified Public Accountants (AICPA), which provide guidelines and rules for conducting audits and other financial reporting activities.

SEC

The Securities and Exchange Commission (SEC) is an agency authorized by the United States Congress to regulate the securities markets and protect investors by enforcing financial reporting practices among public corporations.

SEC Filings

Financial and informational disclosures required by the U.S. Securities and Exchange Commission (SEC) under the Securities Act of 1933 and the Securities Exchange Act of 1934. These filings, which include forms such as 10-K, 10-Q, and 8-K, are mandatory for publicly traded companies to ensure transparency and compliance with federal securities laws.

SEC Registration Statement

A disclosure document that must be filed with the Securities and Exchange Commission (SEC) in connection with a public offering of securities, unless the offering qualifies for an exemption.

SEP Plan

A Simplified Employee Pension (SEP) plan is a type of retirement plan that allows employers to contribute to traditional Individual Retirement Accounts (IRAs) set up for employees, including themselves if self-employed. Contributions are made directly to the IRA of each participating employee.

SFAS

Statements issued by the Financial Accounting Standards Board (FASD), intended to provide guidelines and standards for financial accounting and reporting.

SIA

A trade group that represents broker-dealers, advocating on their behalf and providing industry standards and support.

SPDA

A tax-deferred investment vehicle similar to an Individual Retirement Account (IRA), but without many of the restrictions typically associated with IRAs.

SSARS

Statements on Standards for Accounting and Review Services (SSARS) are standards issued by the American Institute of Certified Public Accountants (AICPA) pertaining to the performance of review and compilation engagements for non-public entities.

Safe Harbor Rule

A provision in statutes and regulations that offers protection from adverse legal action or penalties if specific conditions are met, particularly when a legal requirement is ambiguous or carries a risk of unintended violation.

Sale

A transaction between a buyer and a seller in which the buyer receives goods, services, or securities in exchange for money or other consideration.

Sale-Leaseback Transaction

A financial arrangement in which a property owner sells an asset, typically real estate, to a buyer and then leases it back from the buyer. This enables the seller to continue using the asset while converting it into capital.

Sales Discount

A reduction in the price of goods or services provided to a buyer, typically granted for early payment on sales made on credit.

Sales Tax

A tax imposed by state or local governments on the sale of goods and services, collected by the retailer at the point of sale and remitted to the government.

Salvage Value

The estimated resale value assigned to an asset at the end of its useful life, often used in calculating depreciation of fixed assets.

Savings Bond

A savings bond is a debt security issued by the U.S. government, available in denominations ranging from $50 to $10,000, designed to provide a safe investment option where interest accrues and the bond is redeemable for its face value at maturity.

Seasonality

Variations in business or economic activity that recur with regularity due to factors such as changes in climate, holidays, and vacations.

Secondary Market

A market where securities are traded among investors subsequent to their original issuance in the primary market. This includes exchanges and over-the-counter markets where investors buy and sell securities such as stocks and bonds.

Secured Bond

A bond that provides bondholders with a pledge of specific company assets as collateral to guarantee the repayment of the principal and interest.

Secured Debt

Debt that is backed by the pledge of collateral or other assets, providing the lender with a claim to specific property if the borrower defaults.

Securities Industry Association (SIA)

A trade association representing broker-dealers, which lobbies the government, monitors industry trends, and maintains records of broker profits, primarily focusing on the sale of taxable securities.

Securities and Commodities Exchanges

Organized, national exchanges where securities, options, and futures contracts are traded by members for their own accounts and for the accounts of customers.

Securities and Exchange Commission (SEC)

A U.S. federal agency responsible for enforcing the federal securities laws, proposing securities rules, and regulating the securities industry, including the nation's stock and options exchanges.

Securitization

The process of pooling various types of contractual debt such as residential mortgages, commercial loans, or other receivables, and selling their related cash flows to third party investors as securities, which may be described as bonds, pass-through securities, or collateralized debt obligations.

Security

A security is a transferable certificate of ownership that represents an investment in equity (such as stocks) or debt (such as bonds) and serves as evidence of an interest in or a claim on the assets and earnings of the issuer.

Security Interest

A legal interest granted in an asset to secure the performance or payment of an obligation by a debtor to a creditor.

Self Employment Tax

A tax primarily for individuals who work for themselves, such as sole proprietors, partners, and independent contractors. It covers contributions for Social Security (OASDI) and Medicare (HI), similar to taxes withheld by employers from employee wages.

Sell Out

The liquidation of a margin account by a broker after a margin call has failed to produce additional equity to bring the margin to the required level.

Selling, General, and Administrative (SG&A) Expenses

Selling, General, and Administrative (SG&A) Expenses are the cumulative costs associated with selling products, managing the company, and general overhead. These expenses appear on a company's income statement and include sales commissions, advertising, promotional materials, salaries of non-production employees, and office supplies among other costs.

Sensitivity Analysis

A study that measures the impact of changes in one or more variables on the risk or profitability of an investment or project.

Separate Entity

A principle in accounting where a business is considered distinct and separate from its owners, creditors, and other businesses, allowing for independent financial and legal transactions.

Serial Bond

A type of bond issue, often utilized by municipalities, that is structured with various maturity dates scheduled at regular intervals until the entire issue is retired.

Share

A unit of equity representing ownership in a corporation, which entitles the holder to a proportion of the corporation's assets and profits.

Shareholder

A person or entity that owns shares or equity in a corporation, thereby holding a portion of the corporation's capital stock.

Shares Authorized

The maximum number of shares of stock that a company is legally permitted to issue as specified in its articles of incorporation.

Shares Outstanding

The total number of shares of a company that have been issued and are currently held by investors, including shares held by institutional investors and restricted shares held by company insiders and officers.

Short Bond

A bond with a short maturity period, typically defined as two years or less.

Short Coupon

A bond interest payment that covers a period less than the conventional six-month period.

Short Interest

The total number of shares of a stock that have been sold short by investors and have not yet been covered or closed out.

Short Sale

A financial transaction where an investor sells an asset they do not currently own, typically securities, with the intention of repurchasing them later at a lower price. The investor borrows the asset to make the sale and later buys it back to return it to the lender.

Short Term Gain or Loss

This gain is subject to tax at the investor's ordinary income tax rate, rather than the lower long-term capital gains rate, which applies to investments held for more than a year. For tax purposes, the profit or loss realized from the sale of securities or other capital assets that were held for six months or less.

Short-Term

Referring to a time frame that is typically less than one year, often used in financial contexts to describe obligations or assets that are due or expected to be liquidated within that period.

Short-Term Debt

Financial obligations that are due within one year and are classified as current liabilities on a company's balance sheet.

Short-Term Investment

An investment of excess cash intended to be held for a brief period, usually less than one year, to meet upcoming financial obligations or for temporary financial gain.

Significant Accounts

Accounts considered significant if there exists more than a remote likelihood that they could contain misstatements, which individually or in aggregation, could materially affect the financial statements. This assessment considers the risks of both overstatement and understatement.

Significant Deficiency

A control deficiency, or combination of control deficiencies, in a company's financial reporting processes that adversely affects the ability to initiate, authorize, record, process, or report financial data reliably in accordance with Generally Accepted Accounting Principles (GAAP). This deficiency carries a more than remote likelihood that a misstatement of the company's financial statements, which is more than inconsequential, will not be prevented or detected.

Significant Findings or Issues

In auditing, significant findings or issues refer to substantive matters that are crucial to the procedures performed, evidence obtained, or conclusions reached during an audit. These include significant matters, results of auditing procedures that necessitate substantial modification of planned auditing procedures, audit adjustments, disagreements among engagement team members, difficulties in applying auditing procedures, significant changes in the assessed level of audit risk, and matters that could result in a modification of the auditors' report.

Simple Interest

Interest calculated solely on the initial principal amount of a loan or investment, without compounding on accumulated interest.

Simple Plans

A SIMPLE Plan (Savings Incentive Match Plan for Employees) is a type of employer-sponsored retirement plan available to small businesses with fewer than 100 employees who received at least $5,000 in compensation in the preceding year. This plan allows employees and employers to contribute to individual retirement accounts (IRAs) set up for employees, typically offering tax benefits to both parties.

Simple Trust

A simple trust is a type of trust that is mandated to distribute all its income currently, regardless of whether the distribution actually occurs, and it does not allow provisions for charitable contributions. This type of trust differs from a complex trust and can change its classification based on its activities in a given year.

Simplified Employee Pension (SEP) Plan

A pension plan where only the employer contributes to an individual retirement account (IRA) set up for each eligible employee, providing a simplified method for making retirement contributions.

Single Audit Act

The Single Audit Act is a set of United States federal regulations that require audits for states, local governments, and nonprofit organizations receiving federal funds exceeding a specified threshold. It aims to ensure proper use and management of federal funds.

Single-Premium Deferred Annuity (SPDA)

A financial product similar to an Individual Retirement Account (IRA), into which an investor makes a one-time, lump-sum payment. The funds are invested in either fixed-return or variable-return instruments and grow tax-deferred until distributions are taken.

Sinking Fund

A sinking fund is a separate account where money is regularly accumulated and specifically earmarked for the redemption of debt securities or preferred stock, helping ensure funds are available for these future liabilities.

Small Business Stock

Shares issued by a qualified C Corporation whose gross assets do not exceed $50 million and uses at least 80% of its assets in the active conduct of one or more qualified trades or businesses. Noncorporate investors may exclude up to 50% of the gain realized on the sale of these stocks, provided the stocks were issued after August 10, 1993, and held for more than five years.

Sole Proprietorship

A sole proprietorship is a type of business entity that is owned and operated by a single individual, with no legal distinction between the owner and the business.

Solvency

The state of being able to meet financial obligations as they come due, ensuring the ability to continue operations and meet both short-term and long-term debts.

Solvent

Capable of meeting all financial obligations as they come due, thereby remaining financially stable.

Special Assessment

A charge levied by a local government on property owners to fund specific public projects or improvements from which the property owners will benefit directly.

Special Report

A report issued by auditors related to various types of financial presentations, including financial statements prepared in accordance with a comprehensive basis of accounting other than generally accepted accounting principles, specified elements or items of financial statements, compliance with contractual or regulatory requirements, or financial information presented in a specific prescribed form that necessitates a particular type of auditor's report.

Specialist

A member of a stock exchange designated as the market maker for one or more securities, responsible for maintaining a fair and orderly market by executing limit orders, managing temporary imbalances in supply and demand, and preventing wide swings in stock prices.

Specialized Mutual Fund

A mutual fund that confines its investments to a specific sector of the marketplace, focusing on a particular industry, geographic region, or type of security.

Specific Identification Method

An inventory valuation method that tracks and prices each item in the inventory individually, based on the specific cost of each particular item.

Speculation

The process of making high-risk financial transactions with the potential for significant gains, but also with a higher-than-average possibility of incurring losses.

Spinoff

A corporate action where a company transfers all or a portion of its subsidiary's stock or other assets to the stockholders of the parent company on a pro rata basis.

Split Offering

A new municipal bond issue that is divided into two parts: one part consisting of serial bonds and the other of term maturity bonds.

Spot Market

A market where commodities or financial instruments are traded for immediate delivery and payment based on the settlement conventions of the particular market.

Spread

In finance, spread refers to the difference between two prices, rates, or yields. It can describe the gap between the bid and ask prices of a security, the price difference between buying and selling positions in futures or options for the same commodity but different months, the difference between the price an underwriter buys an issue and the price at which it is sold to the public, or the additional yield an issuer pays over a benchmark rate to borrow money.

Spreadsheet

A computer program that organizes numerical and other data into rows and columns, primarily for the purpose of calculation, analysis, and data management.

Standard

A widely recognized and accepted basis for a system of measurements or criteria.

Standard Cost

Realistic estimated costs for direct materials, direct labor, and factory overhead that are predetermined before the actual production or operation occurs.

Standard Deduction

A fixed amount that individual taxpayers can subtract from their adjusted gross income to reduce taxable income, if they do not itemize their deductions. The standard deduction varies depending on the taxpayer's filing status and is adjusted annually.

Standard Deviation

A statistical measure that quantifies the amount of variation or dispersion of a set of values. It indicates how much individual values in a data set tend to deviate from the mean or average of the distribution.

Start-Up Costs

Expenses incurred during the process of creating a new business. These costs may include expenditures related to legal fees, property leases, marketing, initial inventory acquisition, and other pre-operational activities.

Stated Value

The per share amount determined by the board of directors to be recorded in the capital stock account when issuing no-par value stock.

Statement

A detailed summary provided to customers, outlining the transactions that occurred over a specific period, typically a month.

Statement of Cash Flows

A financial statement that categorizes and summarizes the cash inflows (receipts) and outflows (payments) during a specific period, divided into operating, investing, and financing activities. It provides insight into a company's liquidity and cash position, reconciling the beginning and ending cash and cash equivalents, as required by Generally Accepted Accounting Principles (GAAP).

Statement of Cost of Goods Manufactured

A financial report that summarizes the total manufacturing costs incurred during an accounting period, including the costs of materials, labor, and overhead, to produce goods.

Statement of Financial Accounting Standards (SFAS)

Official documents issued by the Financial Accounting Standards Board (FASB) that detail accounting principles and practices to be used in the preparation of financial statements.

Statement of Financial Condition

A financial statement that presents the assets, liabilities, and equity of an entity as of a specific date, usually accompanied by disclosures that outline the accounting principles used in its preparation. This statement is also known as a balance sheet.

Statement of Owner’s Equity

A financial statement that outlines the changes in the owner's equity, or capital account, over a specific financial period, detailing sources of increase or decrease such as profits, losses, investments, and withdrawals.

Statements on Auditing Standards (SAS)

Statements issued by the Auditing Standards Board of the American Institute of Certified Public Accountants (AICPA) that provide guidelines for auditors to follow in the conduct of an audit.

Statute of Limitations

A law that sets the maximum period during which legal proceedings may be initiated or rights enforced. In the context of tax returns, the statute of limitations typically extends for three years from the date the return is due or actually filed.

Stepped Up Basis

The adjusted value of an inherited asset, where the basis is increased to the fair market value of the property at the time of the decedent's death. This adjustment often results in a higher basis than the decedent's original purchase price, potentially reducing capital gains taxes if the asset is later sold.

Stock Compensation Plan

A fringe benefit that allows employees to purchase the employer's stock at a specified price within a specified period, often used as an incentive or reward.

Stock Exchange

An organized marketplace where stocks, common stock equivalents, bonds, and other securities are bought and sold by members who may act as agents or principals in these transactions.

Stock Market

A public and organized marketplace where securities are traded. The stock market includes various exchanges where stocks, bonds, and other financial instruments are bought and sold.

Stock Options

Financial derivatives that provide the holder the right, but not the obligation, to buy or sell a specified number of shares of a company's stock at a predetermined price within a specified time period.

Stock Rights

Stock rights are privileges granted to existing shareholders of a corporation, allowing them to purchase additional shares at a price typically below the current market value before the shares are offered to the public. These rights can be exercised, sold, or allowed to expire.

Stock Split

A stock split is a corporate action that increases the number of a company's shares outstanding by issuing more shares to current shareholders proportionally, without any additional capital investment from them. This usually results in a reduction in the par value of each share.

Stockholder

A person or entity that owns shares in a company, thereby holding partial ownership and entitled to a portion of the profits in the form of dividends and capital gains.

Stockholders’ Equity

Stockholders' equity represents the ownership interest of shareholders in a corporation, calculated as the difference between total assets and total liabilities.

Straight-Line Depreciation

An accounting method that allocates the cost of an asset evenly across its useful life, reflecting equal wear and tear during each accounting period.

Straight-Line Percentage

A percentage used to determine the amount of depreciation to be recorded each accounting period for the straight-line method of depreciation.

Strike Price

The predetermined price at which the holder of an option can buy (in the case of a call option) or sell (in the case of a put option) the underlying security or commodity.

Subsequent Event

A material event that occurs after the end of the accounting period but before the publication of an entity's financial statements, which may affect the financial statements and is disclosed in the notes to the financial statements.

Subsidiary

A company that is either wholly or partially owned by another corporation, known as the parent company. The parent company holds more than 50% of the voting shares, giving it control over the subsidiary. Subsidiaries can be located in the same or different countries as the parent company, and their financial results are included in the parent company's financial statements.

Sum-of-the-Years-Digits Method

An accelerated depreciation method where the depreciable value of an asset is multiplied by a decreasing fraction each year of the asset's useful life, resulting in higher depreciation charges in the earlier years and decreasing amounts later.

Surplus

An excess amount of an asset or resource compared to what is needed, often used in financial contexts to describe the amount by which revenue exceeds expenses.

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