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Member
 
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Last Login: 12/1/2009 12:47:02 PM
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our firm does not prepare "financial statements" and have hired other firms to "prepare" our probate accountings in the past...
we have heard arguments that a probate accounting is a prescribed form (similar to a tax return) and thus not subject to the peer review program. we have also heard that they are considered a type of compilation, subject to peer review.
any thoughts on this?
IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any matters addressed herein. |
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Member
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Last Login: 12/17/2009 4:06:12 PM
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PPC's Compilation and Review service discusses this issue. SSARS 1 says that the rules for compilation and review apply to estate or trust reporting.
PPC authors do not recommend taking the position that a probate accounting is a prescribed form. They reason that the report is not on a preprinted form.
IMO the preparation of a probate accounting should be subject to peer review. But what needs to be clarified is how we can issue these things without a compilation letter. The courts won't allow those, and attorneys will strip them off before submitting. All responsibility falls on executors or trustees.
Bill Downs, CPA, Sherman Oaks
Allmon (5/15/2008)
our firm does not prepare "financial statements" and have hired other firms to "prepare" our probate accountings in the past...
we have heard arguments that a probate accounting is a prescribed form (similar to a tax return) and thus not subject to the peer review program. we have also heard that they are considered a type of compilation, subject to peer review.
any thoughts on this?
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Power Member
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Last Login: 2/16/2010 6:30:43 PM
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| I attach a compilation letter when I do trust accountings and have verbage on every page to refer to that letter. I haven't had to submit one to the courts recently. The peer reviewer at my last firm indicated that the compilation letter should be attached. He indicated that in his firm, the compilaton letter for all trust or estate accountings indicates that the executor or trustee is not independent. I don't know what that gains them but that's an aside. I agree with Bill that you should attach something. I can forward you an example but I think it's pretty cut and dried.
Mary Kay Foss
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| issue the reports as drafts... and never finalize them!!
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Member
Group: Forum Members
Last Login: 12/1/2009 12:47:02 PM
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since we are not peer reviewed (because we do not do accountings), i guess this is the best choice- and lets hope that the accountings are not needed in final!!
and it looks like, if we will be doing the accountings in the future, this should be in the engagement letter (that the engagement will not be completed, and the accountings will be issues in draft)...
Anonymous (5/19/2008)
issue the reports as drafts... and never finalize them!!
IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any matters addressed herein. |
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Member
Group: Forum Members
Last Login: 12/17/2009 4:06:12 PM
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| I think our choices right now are not adequate. We need something like SSARS 8 for plain paper financial statements. The problem with SSARS 8 is it doesn't allow for 3rd parties seeing the financial statements. We need a modification that says fiduciary accountings are so thorough and self-explanatory, and because trustees bear full responsibility, its OK if 3rd parties to see them and there is no compilation letter.
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