Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

On clients accepting responsibility for reviewed or compiled financials

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Our clients must accept responsibility for the financial statements, even if we draft them.

To understand this, think of the ol’ electrician or schooling illustrations.

Disclaimer:  I attended an A&A update a few months ago (yes, yes, I know – this series of posts has been on the back burner for a long while). Since I’m going to paraphrase comments from speakers who were presenting their personal opinion, I’m not going to mention their names. Just know that these aren’t my original ideas, but you can blame me if you don’t like the way I phrase things.

A staff person from the AICPA reminded us of those illustrations.

When you have a wiring problem in your home, you hire an electrician to fix it. You are still responsible for what happens in your house. You don’t understand amps and watts and wiring and codes and safety, but you really are responsible. You carry out your responsibility by carefully hiring a qualified electrician and making sure the light or outlet works right before you write a check and let the electrician go.

As a parent, you are responsible for the education of your children. You carry out that responsibility by living in a good school district, making sure your child gets to school rested and fed, watching homework & grades, and talking to the teacher once in a while. You don’t know all (much? any?) of the stuff that your child is learning, but you are making sure the learning is getting done.

Clients taking responsibility for their own financials is like the electrical or education issue.  They carefully pick an accountant, provide correct information as requested, and take a look at the financials to make sure there’s not something obviously wrong. Thus, they are taking responsibility.

Written by Jim Ulvog

February 13, 2014, 7:25 am at 7:25 am

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