In April 2025, the Accounting and Review Services Committee (ARSC) issued SSARS No. 27, Applicability of AR-C Section 70 to Financial Statements Prepared as Part of a Consulting Services Engagement. This new standard provides long-awaited clarity for practitioners engaged in client advisory services (CAS), confirming that financial statements or prospective financial information prepared as a by-product of consulting services do not require compliance with AR-C Section 70.
What SSARS 27 Means
SSARS No. 27 explicitly states that AR-C Section 70—which governs the preparation of financial statements under Statements on Standards for Accounting and Review Services—does not apply when those financial statements or forecasts are created as part of a consulting engagement under CS 100, Consulting Services: Definitions and Standards.
This clarification is particularly relevant for professionals offering advisory or management consulting services, where preparing financial data is often incidental to the broader engagement.
However, SSARS No. 27 also makes clear that compliance with AR-C 70 is not prohibited. Accountants may choose to apply AR-C 70 if it adds value or provides additional assurance to the engagement.
Why This Change Matters
Prior to SSARS No. 27, there was uncertainty about whether accountants preparing financial statements in the course of consulting work needed to comply with AR-C 70 requirements. This ambiguity created unnecessary administrative burdens and inconsistencies in practice.
Now, with the issuance of SSARS 27, practitioners can:
- Rely solely on CS 100 for engagements primarily focused on consulting or advisory services.
- Avoid redundant documentation and reporting requirements under AR-C 70 when not applicable.
- Maintain flexibility in determining whether AR-C 70 compliance is beneficial for the engagement or client.
Effective Date and Early Adoption
SSARS No. 27 is effective for the preparation of financial statements for periods ending on or after December 15, 2026, with early implementation permitted.
Practitioners are encouraged to familiarize themselves with the guidance now to streamline their engagement methodologies, particularly if their firm provides advisory services that include financial modeling, budgeting, or forecast preparation.
Conclusion
The release of SSARS No. 27 marks an important clarification for accounting professionals who provide consulting and client advisory services. By clearly distinguishing when AR-C Section 70 applies, the AICPA’s ARSC has simplified compliance and enhanced flexibility for practitioners.
This update allows accountants to focus on delivering strategic, data-driven advisory services under CS 100 without unnecessary procedural overlap, while still maintaining the option to apply AR-C 70 when appropriate.
