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Tips for navigating CPA challenges related to PPP

By Ken Tysiac

Please note: This item is from our archives and was published in 2020. It is provided for historical reference. The content may be out of date and links may no longer function.

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Designed by Congress to provide a lifeline to small businesses and not-for-profits that are suffering from the economic effects of the coronavirus pandemic, the Paycheck Protection Program (PPP) has resulted in many questions for CPAs attempting to serve their clients.

Administered by the U.S. Small Business Administration, the PPP provides forgivable loans to help small businesses cover expenses such as payroll, mortgage interest payments, rent, and utilities.

PPP-associated complexities for CPAs include concerns about acting as agents, and whether performing certain services in association with PPP loans would violate independence, create a conflict of interest, or result in receipt of a contingent fee.

The AICPA Center for Plain English Accounting (CPEA) published a document Wednesday that is designed to help CPAs navigate these challenging issues. The document includes discussion of:

  • The importance of advising clients.
  • Acting as agents and agent fees.
  • Contingent fees.
  • Independence considerations.
  • Special considerations related to assisting attest clients — and nonattest clients.
  • CPA firms’ eligibility for applying for PPP loans.
  • Loan forgiveness considerations.

The CPEA will continue monitoring accounting and auditing issues and guidance related to the pandemic and will publish additional guidance as new developments arise.

Ethics podcast

Ethical issues for CPAs related to the PPP also are addressed in an episode of the Ethically Speaking podcast produced by the AICPA Professional Ethics Division.

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The podcast covers independence related to the agent fee, management responsibilities, obtaining loans from and providing services to a lender who is an attest client, the forgiveness component of the PPP, and much more.

The AICPA’s Paycheck Protection Program Resources page houses resources and tools produced by the AICPA to help address the economic impact of the coronavirus.

For more news and reporting on the coronavirus and how CPAs can handle challenges related to the outbreak, visit the JofA’s coronavirus resources page or subscribe to our email alerts for breaking PPP news.

— Ken Tysiac (Kenneth.Tysiac@aicpa-cima.com) is the JofA’s editorial director.