SSARS 21 and Printing Financial Statements from Quickbooks

By Charles Hall | Preparation, Compilation & Review

May 30

Are you wondering if printing financial statements from QuickBooks triggers a compilation engagement? Here’s the answer.

Many CPAs are still asking if printing financial statements from Quickbooks triggers a requirement to follow SSARS 21. Previously, if a CPA created and submitted financial statements to a client, he had to issue a compilation report. Hear the answer in this video. 

Also, we’ll take a look at whether you as a CPA can issue monthly financial statements in accordance with SSARS 21 and then perform an audit for the same client at the end of the year. 

Note: This video was created in 2015, but the information is still current. SSARS 23 does not alter the answers.

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About the Author

Charles Hall is a practicing CPA and Certified Fraud Examiner. For the last thirty years, he has primarily audited governments, nonprofits, and small businesses. He is the author of The Little Book of Local Government Fraud Prevention and Preparation of Financial Statements & Compilation Engagements. He frequently speaks at continuing education events. Charles is the quality control partner for McNair, McLemore, Middlebrooks & Co. where he provides daily audit and accounting assistance to over 65 CPAs. In addition, he consults with other CPA firms, assisting them with auditing and accounting issues.

  • Richard DelGaudio says:

    I have a follow up question–If the client maintains their own quick books accounting files and I sit at the client’s computer and print out financial statements it seems to me that I have prepared them. If so I must follow ssars 21. However if I sit with the client and the client prints financial statements I have not prepared them???

  • Richard, under SSARS 21 the printing of the statements does not affect the applicability of the standard. You can print the financial statements or the client can print the financial statements and neither action will trigger a requirements to follow SSARS 21. You will only follow SSARS 21 if you are engaged to prepare financial statements or if you are engaged to perform a compilation. The old SSARS 19 trigger for applicability (preparation and submission of the financial statements) is no longer in effect once you begin to use SSARS 21.

  • Doug57 says:

    How is “engage to prepare financial statements” defined? Is it the actual engagement letter? What if I am engaged to do monthly bookkeeping so that a sch C tax form can be completed at year end & the monthly sales tax filing. I supply the client with the unadjusted monthly detail GL & cash basis financial statements from Quickbooks to give him info & to show that the work was done. Is this “engaged to prepare financial statements”? If so, what aspect makes it so? What if just the detail GL was supplied?

  • Good question Doug. It’s really not defined in SSARS 21. I called the AICPA and asked this same question. I was told you are engaged when the client asks you to prepare financial statements; then the CPA creates the engagement letter is response to being asked to prepare the financials. If you create financial statements as a byproduct of another service (e.g., tax return), then SSARS 21 compliance is not required. I tend to think your sch C situation is a “byproduct” of another service (e.g., bookkeeping) unless the client has specifically asked you to prepare financial statements.

  • Deanna Crimi says:

    Does this answer apply if you know the “Printed financial statements” will be provided to a third party (bank)? For example, if I print the financial statements from QuickBooks Online and provide to the client, who in turn gives it to their bank, would I need to follow SSARS 21?

  • Deanna, the answer depends upon whether you are engaged to prepare financial statements. If the client hires you to prepare financial stataements, then you are required to follow SSARS 21. If the client does not engage you to prepare financial statements, then SSARS 21 does not apply. The trigger is never who prints the financial statements: it is always whether you are hired to create financial statements.

  • Scott Murray says:


    So, creating and printing financials that are a byproduct of bookkeeping and preparing tax returns does not necessarily require compliance with SSARS 21. But, are you saying we can physically hand a client a copy of the ” quickbooks financials” that I printed as a result of doing a tax return and/or bookkeeping services without following SSARS 21? After all, I may want to provide the client this information since it ties to doing a tax return. You are basically saying that if you are not engaged to do a financial statement, then you are allowed to physically give a set of financial statements to the client without following SSARS 21 because those financials were a byproduct of doing a tax return and/or doing bookkeeping. Shouldn’t we still “stamp” those financials as “for management use only”??? I don’t want those financials going out to the world (third party,etc).

  • Yes, that is what the AICPA has said–issuing financial statements as a byproduct of a tax return does not trigger SSARS 21, nor the delivery of the statements. You must be engaged to prepare financial statements before SSARS 21 is triggered. The “management use only” option has been removed from the standards. You do have the option to have the client engage you to prepare the financial statements and then put “no assurance is provided” on the face of the statements–but then you are subject to SSARS 21. There are definitely some litigation exposure issues to consider in deciding the right course of action. It’s safer–I think–to be engaged and follow SSARS 21.

  • Scott Murray says:

    Thanks for your response. This just seems a bit much for what I call “just a tax client” or just a “bookkeeping client”. SSARS 21 doesn’t necessarily need to be followed if we, the CPA, hand a client a balance sheet and P&L as a byproduct of those two types of engagements (also we clearly state in engagement letter about not issuing stmts). But, how do we prove that those statements we handed to the client are a byproduct of non-financial statement type engagements? It appears that AICPA (and especially our insurance company) wants us to apply SSARS 21 to be on safe side. This can be impractical at times in reality when clients just want help printing reports or we need printed reports to go over the financial information on those reports so we can do an accurate tax return. I hope this makes sense! Again, thanks for your responses.

  • Charles Hall says:

    Scott, You are making sense. I think that’s why the AICPA allows the financial statements as a byproduct of tax services to escape SSARS 21. I don’t believe there is a requirement to “prove that those statements we handed to the client are a byproduct.” The SSARS 21 requirements only get triggered upon being engaged to prepare FS. You might want to add a memo to the file to document what you did.

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