I find that many CPAs aren’t aware of the AICPA Consulting Standards. So, here’s a post about them.
Are you ever asked to perform an atypical engagement (e.g., creating a schedule of water losses for a city)–and then you wonder “what professional standards should I follow?”
Audit standards? No, you’re not opining on anything.
Maybe the compilation and review standards? No, a schedule is not a financial statement.
How about agreed upon procedures? Well, no again–AUPs normally include tests and conclusions.
We need another arrow in our quiver!
Most CPAs are familiar with compilation and review standards (Statement on Standards for Accounting and Review Services – SSARS) and audit standards (Statement on Auditing Standards – SAS) and even attestation standards (Statement on Standards for Attestation Engagements – SSAEs – commonly used for agreed upon procedures), but many are not familiar with the consulting standards (Statement on Standards for Consulting Services – SSCS).
I’m not really sure. But I seldom see consulting standard CPE classes. Yet many services are subject to this guidance.
You might call the AICPA Consulting Standards the CPA’s swiss army knife.
The consulting standards specifically address six areas:
CPAs often provide consulting services such as the following:
Usually when the information will not be provided to a third party.
When performing work under the consulting standards, you are not attesting (providing comfort) on the work performed. Usually, you need to follow the SASs, SSARS, or SSAEs if you are attesting (providing comfort to an outside party).
Consulting work paper requirements are minimal. Nevertheless, documentation is always wise.
The understanding with the client can be oral or in writing (I recommend the latter).
The consulting standards do not require the CPA to prepare work papers, but you should do so anyway – the work papers are the link between your work and your report. Also the general standards of the profession, contained in the AICPA Code of Professional Conduct, apply to all services performed by members. The general standards state:
Sufficient Relevant Data. Obtain sufficient relevant data to afford a reasonable basis for conclusions or recommendations in relation to any professional services performed.
The report content and format are up to you and your client.
For consulting engagements, the CPA does not issue an opinion or any other attestation report (e.g., accountant’s report on agreed-upon procedures ).
Are products created using the Consulting Standards subject to peer review? No.
You can see the consulting standards here.
Photos above are courtesy of iStockphoto.com.
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Charles Hall is a practicing CPA and Certified Fraud Examiner. For the last thirty years, he has primarily audited governments, nonprofits, and small businesses.He is the author of The Little Book of Local Government Fraud Prevention and Preparation of Financial Statements & Compilation Engagements. He frequently speaks at continuing education events.Charles is the quality control partner for McNair, McLemore, Middlebrooks & Co. where he provides daily audit and accounting assistance to over 65 CPAs. In addition, he consults with other CPA firms, assisting them with auditing and accounting issues.
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