Amendment clarifies CPAs’ financial statement preparation engagements

The AICPA Accounting and Review Services Committee (ARSC) voted Wednesday to issue an amendment clarifying that a CPA preparing financial statements as part of a consulting services engagement performed in accordance with CS Section 100, Consulting Services: Definitions and Standards, is not required to apply AR-C Section 70, Preparation of Financial Statements.

Statement on Standards for Accounting and Review Services (SSARS), Applicability of AR-C Section 70 to Financial Statements Prepared as Part of a Consulting Services Engagement, will be effective for the preparation of financial statements for periods ending on or after Dec. 15, 2026, with early implementation permitted. It will amend SSARS No. 21, Clarification and Recodification, as amended, AR-C Section 70.

The SSARS is expected to be published in early April.

“The practical difference for CPAs is that if they perform the engagement outside of AR-C Section 70, the quality management standards do not apply, and the engagements are not included in the population subject to peer review,” said Mike Glynn, CPA, CGMA, AICPA associate director–Audit & Attest Standards and ARSC staff liaison.

The project arose from questions regarding whether AR-C Section 70 is required to be applied in situations in which controllership or CFO services are performed under the consulting standards and financial statements are created as part of that. Because financial statement preparation is not an attest service, ARSC determined that excluding such engagements would not adversely affect the public interest.

CS Section 100 states that the general professional standards of professional competence, due professional care, planning and supervision, and sufficient relevant data apply to consulting services. Furthermore, in such situations, practitioners are required to follow the AICPA Code of Professional Conduct.

— To comment on this article or to suggest an idea for another article, contact Bryan Strickland at Bryan.Strickland@aicpa-cima.com.