Appraisal Standards Board's Proposed Changes to the Communication and Reporting Requirements of USPAP (Continued from the Advocacy Homepage)
The AICPA FVS Executive Committee issued a comment letter in response to the Appraisal Standards Board's proposed change to the communication and reporting requirements of the Uniform Standards of Professional Appraisal Practice (USPAP). The proposed change would directly conflict with Rule 26 of the Federal Rules of Evidence and have a significant impact on appraisers who work in a litigation environment. Under Rule 26, valuation analysts do not need to keep copies of draft reports or to disclose copies of draft reports to opposing litigants or opposing counsel.
While AICPA members do not have to comply with USPAP, a significant percentage of our members do comply with USPAP either voluntarily or as a requirement of their membership in some other professional organization. The FVS Executive Committee issued these comments to inform the Appraisal Standards Board of the impact the proposed changes would have on AICPA members who comply with USPAP.
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|CPAs Gain Statutory Exemption from Red Flags Rule
Following years of advocacy efforts and a legal battle, CPAs received a permanent exemption from the Federal Trade Commission’s Red Flags Rule with President Barack Obama’s signing of the Red Flag Program Clarification Act of 2010 on Saturday, December 18, 2010.
In 2003, Congress passed legislation (Fair and Accurate Credit Transactions Act, or “FACTA”) intended to curb identity theft. Pursuant to this legislation, the FTC issued, on November 9, 2007, a "Red Flags" rule that requires “creditors” or “financial institutions” with “covered accounts” to implement a written identity theft prevention program to detect warning signs of identity theft in their day-to-day operations. Enforcement of the rule has been postponed numerous times—most recently until Dec. 31, 2010—since the original Nov. 1, 2008, effective date.
“The AICPA is pleased Congress passed and the president has signed into law S. 3987, the Red Flag Program Clarification Act of 2010, amending the Fair Credit Reporting Act,” said AICPA President and CEO Barry Melancon in a statement. “The AICPA, with help from state CPA societies nationwide, worked tirelessly on this issue. The bill makes clear that CPAs and CPA firms are not classified as ‘creditors’ for the purposes of the FTC’s Red Flags Rule. CPAs and CPA firms often do not receive full payment from clients at the time services are rendered. That is not the same as a financial transaction like bank loan or a credit card where ID theft is a risk. This legislation makes clear that a CPA's billing cycle isn’t an identity theft risk. This legislative fix to a burdensome regulation is a positive development in Washington.”
While CPAs may be exempt from the Red Flags Rule, their clients may not be. Access information on the Red Flags Rule which may be helpful when assisting clients.