Discussion:NON CPA PREPARING REVIEWED FINANCIAL STATEMENT
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Discussion Forum Index --> Accounting Questions --> NON CPA PREPARING REVIEWED FINANCIAL STATEMENT
| 22 March 2007 | |
| I just lost a bid for a reviewed Financial Statement to a non cpa accountant. I told the client that they are not allowed to prepare attestation statements if they are not CPA's. I cannot find this anywhere specifically in the code of ethics and the client wants some type of documentation. Help please.The statement is used for outside parties. I am in Rhode Island if that makes a difference. Thank you. | |
| 22 March 2007 | |
| Maybe I am out of the loop, but I have never heard of this. As a non CPA I have prepared many financial statements for my clients. But, then again I have never heard of bidding out CPAs/accountants for work either.
Kevin, JR, anyone....? I am curious. | |
| 22 March 2007 | |
| From what I know compilation and auditing/attestations are different animals :P Is your client a public or private firm? | |
| March 22, 2007 | |
| Who is requesting that reviewed financial statements be prepared? If it is a third party, then you or the client could ask them what they are expecting. In my experience, outside parties expect audits and reviews to be performed by CPAs. One of the reasons they do so is because they know CPAs have to follow certain "rules" (standards) when they review or audit statements. Since this accountant is not certified, what standards would he or she be using to do this review? My guess is probably none, which is why the bid came in lower. | |
| 22 March 2007 | |
| State law determines who can practice "accounting", and usually reserves the terms "audited" and "reviewed" for licensed accountants (some states have more than 1 tier of license). So in many states, non-licensed individuals can perform compilations, but not reviews or audits. | |
| 22 March 2007 | |
| Audited and reviewed. What a farce, and what a state lobbying effort by CPA's.
Reconcile a few accounts, confirm a few balances, spot check some inventory, pull a few invoices, confirm a couple recievables, review some loan docs, etc. Here's the bill................... By the way, which intern or fresh out of college new hire is going to do this auditing and reviewing under the "supervision" of the 3 year ago grad? | |
Hellothere (talk|edits) said: | 22 March 2007 |
| In Washington state a non-CPA cannot use the terms review, audit or compilation. WA State Board of Accountancy provides a non-CPA with a "Safe Harbor Language" to use with their reports. http://www.cpaboard.wa.gov/rules/Policies/safeharborplcy.html | |
| 22 March 2007 | |
| In FL, you cannot compile a reviewed or audited financial statement unless you are a CPA. Compilations are ok, but you are not allowed to review or audit the financial statements and cannot use the terms in your letter accompanying them... | |
| March 23, 2007 | |
| Gosix, there's quite a lot more (and less -- client usually reconciles the accounts) to auditing and reviewing financial statements than you make it out to be.
Hellothere, thank you for the link. It's nice to learn about other state laws. Sandy, thanks for your input, too. (I couldn't leave you out now, could I?) | |
| 23 March 2007 | |
| Yes there is more, I forgot the most valuable lesson learned.
When in doubt, just label it immaterial. | |
| 23 March 2007 | |
| Thanks everyone, I found my citation. Non licensed individuals cannot perform attestation services in just about every state.
Natalie, don't waste your time trying to match wits with Gosix. He/she is unarmed. | |
| 23 March 2007 | |
| Enron, Worldcom, MCI, Global Crossing, Sock Puppet.com, QWest, Dynergy, etc.....
All signed off on and audited by a vaunted professional state licensed CPA. Could the work have been done any worse? Were the fools relying on these audited statements and financials protected by the vaunted CPA? Nope. | |
Bushmaster (talk|edits) said: | 23 March 2007 |
| "Audited and reviewed. What a farce, and what a state lobbying effort by CPA's.
Reconcile a few accounts, confirm a few balances, spot check some inventory, pull a few invoices, confirm a couple recievables, review some loan docs, etc. Here's the bill................... By the way, which intern or fresh out of college new hire is going to do this auditing and reviewing under the "supervision" of the 3 year ago grad? "
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| 5 April 2007 | |
| PVVCPA -- can I? Haven't sat for my license yet, but just completed my MBA while working full time and raising three kids, and keeping my husband relativily happy...so I have some ground to stand on when I say...GET A LIFE!!!!
You know what? Sorry that you are upset that you can't review statements, there is a reason for that...they want to keep most of the idiots from doing it...just think how many more ENRON's we would have if that had happened...I want my CPA license and no I don't think that it will make me do my job any better, mainly because as a person I am already very ethical...but at least the CPA's that goofed on the above mentioned companies are now facing recriminations for doing so...think about it... As for whether or not a non-CPA can issue a review for financial statements...go to your states department of labor and licensing (or variation thereof) and look at the qualifications. Also place a call through to the state board and they'll be able to tell you as well... | |
| 5 April 2007 | |
| Lat, there are idiots in every profession. Some even have credentials. | |
| April 6, 2007 | |
| Laticiaw, I like your line "keeping your husband relatively happy." I think that is the most any spouse can strive for. That is my highest goal with my wife. Only shopping and Grey's Anatomy can take her higher.
Keep going with your plan Laticia. Soon you'll have a whole alphabet after your name, like somebody else we know. | |
| 21 April 2007 | |
| If thats what Gosix thinks then preparing a tax return is just putting numbers in boxes, and preparing a financial statment is much the same. Good to know what the uneducated masses believe.
Makes me think that maybe I should start to repair my own car - if I drive, I must know how the engine works. I could apply this logic to life, what a wonderful feeling I am free of ever really needing to know anything! | |
