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The AICPA Accounting and Review Services Committee is in the process of drafting an amendment to Statements on Standards for Accounting and Review Services (SSARS) that would preclude CPAs from issuing compilation reports if they perform certain "management" type duties. Those duties would include the following--

    * hiring and terminating employees,

    * signing checks,

    * making investment decisions,

    * serving as officer or director of the company, and

    * authorizing purchases or expenses.

Under current practice, when CPAs perform these types of services they state in their compilation reports that they are not independent.

The accounting and review services committee is considering wording that the CPA should use for transmitting financial statements when he or she performs management duties of the type described above. An issue, of course, is the liability risk of the CPA when issuing such a transmittal which presumably will explain the managerial responsibilities.

Eli Mason, CPA, past president of the NYSSCPA, and frequent commentator on professional issues, believes that this proposed change to standards would limit CPAs' ability to provide an important service. Accordingly, he is encouraging CPAs to review their own situations and let the AICPA know of the impact of this basic service no longer being permitted.

Mason states that many CPAs from around the U.S. object to the change and he has received copies of numerous opposition letters sent to AICPA Chair Stuart Kessler and President Barry Melancon. Many of the letters indicate that in their compilation reports CPAs contain the caveat, "We are not independent of XYZ Company," pursuant to SSARS standards, and that the proposed change would seriously affect their relationships with clients. Mason believes thousands of CPA firms, from sole practitioners to some of the major firms, could be harmed by the proposed change. *

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