May 1999 Issue


AICPA council regional meetings were held in New York, Dallas, Los Angeles, Chicago, and Orlando to test the waters on several issues to be discussed and acted upon at the full council meeting in May in Washington, D.C. The regional meetings are informal in nature; their purpose, among other things, is to discuss important issues and how council members feel about them. Based upon feedback obtained from the regional meetings, AICPA leadership will decide how to proceed and what formal action to take at later meetings.

At the March regional meetings, for example, informal opinions were sought on the following issues:

* Should the AICPA Code of Conduct be changed to permit CPAs to accept commissions and contingent fees for services if the service giving rise to the commission or contingent fee is not an attest service as defined? Such a change would shift the determining factor from a client basis to an engagement basis.

The reason for discussing such change, which would require a vote of the membership, is a recent change in the Florida accountancy statute that only restricts commissions and contingent fees as payment for attest services.

* Should the AICPA governing rules be changed to permit all CPAs, whether in a CPA firm or an alternative practice structure, to compile financial statements under SSARS No. 1? Such a change would mean that CPAs working for the tax and business organizations that have been acquiring accounting practices could issue compilation reports. Under the current edition of the AICPA/NASBA Uniform Accountancy Act (UAA) and under most existing accountancy laws, only CPAs working in CPA firms can issue compilation reports under SSARS No. 1.

The reason for considering this change also comes from Florida. In order to comply with court decisions, the Florida accountancy regulations had to be changed to give licensed CPAs working for organizations such as American Express Tax & Business Services the authority to issue some form of report on financial statements. Florida came up with a fourth level of service, which it calls an assembly, that all CPAs can perform. The AICPA board of directors believes that if the AICPA rules are changed to permit all CPAs to issue compilation reports, the Florida statutes and regulations will be amended to eliminate the assembly service and thereby conform to AICPA professional standards.

* Should the AICPA Accounting and Review Services Committee be encouraged to amend SSARS to enable a fourth level of service that would permit CPA involvement with financial statements that are restricted to internal use? Such a change would enable CPAs to submit financial statements to clients for internal use without making comment on whether such statements conformed to GAAP (or another comprehensive basis of accounting) or attaching an accountant's report.

The reason for discussing this change comes in part from the NYSSCPA board of directors' decision to include in proposed changes to New York accountancy statutes a provision that would exempt internal use statements from professional standards. In other words, the CPA would be able to give a client financial statements for internal use in the form that the client felt most useful without regard to whether the statements met GAAP.

* Should the membership of the Professional Ethics Executive Committee be expanded to include public members? The AICPA board of directors has recommended that the addition of public members would enhance the standards-setting, enforcement process.

In view of the perceived benefits of public
members in standards setting--as seen in the makeup of the Independence Standards Board--such a change seems appropriate.

Straw votes taken at the regional meetings are not made available to the public. They will, of course, be reflected in the agenda for the May council

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