Licensed CPAs are subject to regulation by their respective state boards of accountancy and strict professional ethics rules adopted by the boards to protect the public against fraud, incompetence and conflicts of interest.
In addition, members of the American Institute of CPAs have to adhere to the AICPA Code of Professional Conduct, which sets forth certain standards of professional conduct.
The Statement on Responsibilities in Personal Financial Planning Practice establishes guidance for AICPA members who provide personal financial planning services. This guidance applies whether personal financial planning services are provided on a stand-alone basis or as part of another engagement, and whether such services are provided on a comprehensive, segmented or consultation basis.
Note that AICPA’s governing Council recently granted the PFP Executive Committee standard-setting authority, paving the way for the creation of enforceable PFP professional standards. These standards will provide AICPA members who offer financial planning services with practice and competency guidelines. Next steps include vetting by senior committees and public exposure, expected to begin in late April, 2013.
Learn more about specific issues related to personal financial planning services:
Objectivity, Independence and Disclosure
Independence and Conflicts of Interest
Commissions and Referral Fees
Fiduciary Standard of Care
AICPA members are bound by the AICPA Code of Professional Conduct. Rule 201 requires that members provide professional services with competency. In the delivery of personal financial planning services, a member shall adhere to the following Principles of Professional Conduct.
ET Section 52 – Article I – Responsibilities
In carrying out their responsibilities as professionals, members should exercise sensitive professional and moral judgments in all their activities.
Section ET 53 – Article II – The Public Interest
Members should accept the obligation to act in a way that will serve the public interest, honor the public trust and demonstrate commitment to professionalism.
Section ET 54 – Article III - Integrity
To maintain and broaden public confidence, members should perform all professional responsibilities with the highest sense of integrity.
Section ET 55 – Article IV – Objectivity and Independence
A member should maintain objectivity and be free of conflicts of interest in discharging professional responsibilities. A member in public practice should be independent in fact and appearance when providing auditing and other attestation services.
Section ET 56 – Article V – Due Care
A member should observe the profession's technical and ethical standards, strive continually to improve competence and the quality of services, and discharge professional responsibility to the best of the member's ability.
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CPAs who provide personal financial planning advice are often viewed as clients’ most trusted advisors. Personal financial planning is the process of identifying an individual’s goals, evaluating existing resources and designing the financial strategies that, when implemented, move the individual toward achieving these goals. In addition, personal financial planning may include implementing, monitoring and updating the financial plan. Personal financial planning encompasses a broad range of services in a variety of interrelated financial areas, including the following:
In addition, personal financial planning often addresses more specialized issues such as financial recordkeeping, planning for education costs, philanthropy, divorce, planning for elder issues and many other issues related to clients’ finances.
The Personal Financial Planning Executive Committee has issued this Statement on Responsibilities as a practice aid to provide educational guidance to members that bridges their responsibilities in personal financial planning to the AICPA Code of Professional Conduct.
AICPA’s governing Council recently granted the PFP Executive Committee standard-setting authority, paving the way for the creation of enforceable PFP professional standards. These new professional standards will provide AICPA members who offer financial planning services with practice and competency guidelines.
Next steps include full vetting by senior committees and thorough public exposure, expected to begin in late April, 2013.
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