SSARS applies to which type of financial statement engagements?

SSARS, or Statements on Standards for Accounting and Review Services, specifically applies to the preparation, compilation, and review of unaudited financial statements for nonissuers. Nonissuers refer to entities that are not publicly traded and do not have to follow the stringent requirements set for public companies, such as those under the Sarbanes-Oxley Act.

For engagements involving audited financial statements, different standards apply, such as those established by the AICPA for audits, which are not covered under SSARS. The focus of SSARS is on providing guidance for accountants performing less comprehensive engagements, namely those that do not involve the independent auditor's examination of the financial statements for compliance or validity.

Engagements related to internal management reports also do not fall under the scope of SSARS since these reports serve an internal purpose and do not require the level of assurance or formal compliance that SSARS governs. Therefore, unaudited financial statements represent the correct context in which SSARS is applicable, thereby affirming the right choice.