Terms used in our case studies.

SSARS 21

The AICPA Statements on Standards for Accounting and Review Services that govern preparation (AR-C 70), compilation (AR-C 80) and review (AR-C 90) engagements for private companies.

Compilation

A CPA assists management in presenting financial statements and issues a report without providing any assurance.

Review

A CPA performs analytical procedures and inquiry and provides limited assurance that no material modifications are needed. It is not an audit.

Audit (GAAS)

An examination under generally accepted auditing standards that gives reasonable assurance and ends in an opinion on the financial statements.

Reg CF

SEC Regulation Crowdfunding, which lets private companies raise capital online through registered portals, with financial statement requirements tied to the amount raised.

FDD

Franchise Disclosure Document, the disclosure a franchisor gives prospective franchisees under the FTC Franchise Rule, including audited financial statements.

Economic nexus

A state's right to tax a remote seller based on sales or transactions into the state, upheld in South Dakota v. Wayfair (2018).

Installment method (§453)

A tax method that spreads gain on a sale over the years payments are received, used for seller-financed sales.

Reasonable compensation

The salary an S corporation must pay an owner who works in the business before taking distributions.

FBAR

FinCEN Form 114, the report US persons file when foreign accounts exceed $10,000 in aggregate during the year.

Gift of equity

The difference between a home's fair market value and a lower price paid by a family member, reported by the seller as a gift.

Carve-out financial statements

Statements for one part of a business prepared as if it stood alone, with shared costs allocated on a stated basis.

Parallel run

A period when old and new accounting systems operate side by side before full cutover.

CS 100

The AICPA Statement on Standards for Consulting Services, used for advisory work such as CPA assessment letters that provide no assurance.

Last updated Oct 17, 2026. These definitions are general information, not tax or legal advice for your situation.