AICPA Council Votes To Permit CPAs In Non-CPA Firms To Issue Compilations
At its May meeting, the AICPA Council passed a resolution to permit CPAs in non-CPA firms to issue compilation reports under the Statements on Standards for Accounting and Review Services. The main objective of the resolution is to eliminate the need for recently enacted legislation in Florida that created a fourth level of financial statement service called an assembly. Because of a number of court decisions, the Florida Board of Accountancy was obligated to develop a way for CPAs working in non-CPA firms such as American Express Tax and Business Services to issue reports on financial statements. Under existing AICPA standards, however, CPAs are not permitted to submit assembly reports to clients and others.
With the passage of the resolution, rescission of the Florida legislation is expected.
The resolution revises the language of Rule 505, Form of Organization and Name, to eliminate the requirement that compilation reports be issued by CPA firms. The resolution requires, however, that non-CPA organizations that issue compilation reports must assign to a CPA the ultimate responsibility for any financial statement compilation services provided by the firm and for each business unit performing such compilation services; non-CPA owners cannot assume ultimate responsibility for such services. The resolution also states that any compilation report issued by a CPA in a non-CPA firm must be signed individually and may not be signed in the name of the firm or organization.
The Uniform Accountancy Act will have to be revised to accommodate the Council's resolution. States such as New York that have UAA-type legislation in the works will have to decide whether to change their legislation to accommodate the resolution.
The resolution passed with relative ease. It appears the desire to eliminate the need for the assembly service in Florida was considered more important than the fact that CPA firms are losing the competitive advantage of being the only entities permitted to issue compilation reports. Small CPA firms that rely principally upon financial statement services may not agree. *
The CPA Journal is broadly recognized as an outstanding, technical-refereed publication aimed at public practitioners, management, educators, and other accounting professionals. It is edited by CPAs for CPAs. Our goal is to provide CPAs and other accounting professionals with the information and news to enable them to be successful accountants, managers, and executives in today's practice environments.
©2009 The New York State Society of CPAs. Legal Notices
Visit the new cpajournal.com.