January 1999 Issue


The third edition of the Uniform Accountancy Act, as developed by the AICPA and the National Association of State Boards of Accountancy (NASBA), sets forth the services that only licensed CPAs (and in some jurisdictions) public accountants can provide. It basically covers services as set forth in Statements on Auditing Standards (SAS) and Statements of Standards for Accounting and Review Services (SSARS). The UAA does not restrict unlicensed persons from preparing, issuing, or submitting financial statements that do not purport to be covered by those standards. In fact, it proposes safe-harbor language for unlicensed individuals when so doing.

The AICPA and NASBA recently announced a recommendation to change the UAA in order to clarify its effect on unlicensed individuals and improve the safe-harbor language. The recommendation resulted from meetings with representatives of the National Society of Accountants (NSA) and the National Association of Enrolled Agents (NAEA).

The UAA would be changed to positively state that nonlicensees are not restricted from preparing financial statements and issuing reports thereon that do not purport to be in compliance with SSARS. The safe-harbor report would be modified to eliminate the statement that the person issuing the report is not licensed to practice in the jurisdiction.

The language of the safe harbor would read as follows:

I (We) have prepared the accompanying (financial statements) of (name of entity) as of (time period) and for the (period) then ended. This presentation is limited to preparing in the form of financial statements information that is the representation of management (owners).

I (We) have not audited or reviewed the accompanying financial statements and accordingly do not express an opinion or any other form of assurance on them.

The announcement states it was never the intent of the UAA "to limit the rights of unlicensed individuals to provide basic financial statement services or tax services to their clients."

The proposed changes are subject to approval by the AICPA and NASBA boards of directors. *

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