How SSARS 27 Makes Things Better for CPAs
In April 2025, the AICPA’s Accounting and Review Services Committee (ARSC) issued Statement on Standards for Accounting and Review Services No. 27 (SSARS 27). SSARS 27 is titled Applicability of AR-C Section 70 to Financial Statements Prepared as Part of a Consulting Services Engagement.
CPAs commonly discuss operations and financial statements with a client, often every month. Such services focus on advising the owners or management about how the company is performing and how to improve profitability.
Before SSARS 27, CPAs often wondered, “Am I subject to AR-C 70 when creating monthly or annual financial statements for such a client?”
SSARS 27 was issued to resolve whether AR-C Section 70 must be applied when financial statements are prepared as part of consulting services under CS Section 100, Consulting Services. This uncertainty had created compliance concerns for practitioners offering services that included financial statements, but for which the preparation was not the primary objective.
Purpose of SSARS 27
Key Takeaways
1. Consulting Engagements Now Clearly Excluded from AR-C Section 70
The amendment excludes financial statements prepared as part of a consulting engagement from the mandatory application of AR-C Section 70 when preparation is not the primary objective. However, CPAs may voluntarily apply AR-C Section 70 requirements such as including a statement that “no assurance is provided” on the financial statements.
2. Clarified Scope of AR-C Section 70
The amended paragraph .01 of AR-C Section 70 now states that it does not apply to:
- Consulting engagements under CS Section 100,
- Personal financial planning under PFP Section 100,
- Business valuation services under VS Section 100,
- Preparation solely for submission to taxing authorities,
- Litigation support
These clarifications reinforce that nonattest services, such as consulting, do not automatically fall under the purview of SSARS—even when financial statements are involved.
3. Protection of Public Interest
ARSC concluded that this exclusion does not compromise the public interest, for two key reasons:
- Both consulting engagements and preparation services under AR-C Section 70 are nonattest services—no assurance or opinion is expressed.
- CS Section 100 includes safeguards that help prevent misleading users regarding the CPA’s association with the financial statements.
4. Implications for Practice Management and Peer Review
Because consulting engagements are outside the scope of accounting and auditing practices:
- They are not subject to a firm’s system of quality management under SQMS,
- Firms conducting such engagements may not be required to enroll in a peer review program.
SSARS 27 offers relief for smaller practices and CAS providers—fewer compliance obligations when offering advisory services that include some element of financial reporting.
5. Effective Date and Early Adoption
SSARS 27 becomes effective for the preparation of financial statements for periods ending on or after December 15, 2026. Early implementation is permitted, giving practitioners ample time to adjust their policies and engagement letters.
Why SSARS 27 Matters for CPAs
SSARS 27 provides long-awaited clarification that helps CPAs differentiate consulting engagements from preparation services. It removes ambiguity, allowing practitioners to confidently scope engagements under CS Section 100 without unnecessarily applying AR-C Section 70—so long as the financial statement preparation is incidental rather than the focus. (Consider documenting why you believe the financial statements are incidental to the consulting service.)
AR-C 70, Preparation
A signed engagement letter is required when using AR-C 70. However, it is not required when using the consulting standards, though I recommend you do so anyway.
AR-C 70 has other requirements that the consulting standards do not, such as the inclusion of a disclaimer on each financial statement page (No assurance is provided on these financial statements).
Also, peer reviewers will sometimes review preparation engagements, but consulting services are not subject to peer review.
Final Thoughts About SSARS 27
If you prepare financial statements as part of a consulting engagement, you can use the consulting standards rather than the SSARS. The consulting standards are only seven pages long, so there is less to consider compared to AR-C 70.
Consulting work is performed only for the client’s use and benefit. If the financial statements are to be provided to external parties, I suggest using standards such as compilation, review, or audit.
You still have the option to follow AR-C 70, Preparations or AR-C 80, Compilation Engagements, but those engagements are subject to peer review. If you desire to include a report, consider using AR-C 80 and issue a compilation report.
Here’s my video explanation.
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