States Updating Attest Language to Protect the Public Interest

March 31, 2014

As the American Institute of CPAs (AICPA) and National Association of State Boards of Accountancy (NASBA) finalize new language in the profession’s model state act (the UAA) concerning the definition of attest, several states have taken early action to update their statutes in order to protect the public interest. 

Attest services are a unique set of services that require the competency and expertise of a qualified CPA to be performed.  They are limited to licensees and CPA firms, and licensees can only perform these services through a CPA firm.  This ensures attest services are performed under robust regulatory oversight by state (and sometimes federal) agencies, in addition to a peer review process.  Services generally include audits, reviews of financial statements, examinations of prospective financial information, Public Company Accounting Oversight Board engagements and, in some states, compilations.

The AICPA and NASBA are updating the UAA language because they have identified potential public protection “loopholes” in the attest definition as the marketplace for attest services and the needs of clients have been changing.  CPAs increasingly are requested to provide assurance on a growing list of client needs, including sustainability reports, greenhouse gases, the use of eXtensible Business Reporting Language, and reports on service organizations.  However, non-CPAs operating outside of CPA firms are currently offering many of these services and issuing reports using the AICPA’s Statement on Standards for Attestation Engagements (SSAE).

Both the AICPA and NASBA are concerned about the risk to the public when these non-CPAs offer these services.  It is possible for the public (or other end-users of a report) to be confused or misled when relying on a report issued by a non-CPA who suggests or claims to have applied AICPA standards.  There are also no assurances of quality, competency, and appropriate regulatory oversight when non-CPAs seek to use these profession standards.

At the start of 2014, 16 states already had a definition of attest language in their accounting statutes similar to the new public protection language.  Several other states have taken early action this year, and many more have indicated that they plan to update their statutes in 2015 or 2016. 

On March 18, Alabama Society of CPAs-supported attest bill, S.B. 146, was signed by Governor Robert Bentley (R-AL).  Jeannine Birmingham, CPA, CGMA, President & CEO of the Alabama Society of CPAs (ASCPA), applauded the signing and ASCPA members’ efforts in supporting the legislation.  “With our statute amended, the public can be assured that only a technically competent, adequately regulated, licensed CPA operating in a licensed firm is performing attest functions.”  She stated, “This was a top legislative priority for ASCPA and our members really came through when it counted.” 

Other states are also seeing legislative activity.  Earlier in March, the Indiana CPA Society-supported attest update bill S.B. 421 was sent to Governor Mike Pence (R-IN), and the Georgia Society of CPAs-supported revision bill H.B. 291 passed both chambers and is also awaiting gubernatorial approval.  Meanwhile, a statute overhaul with the revised attest language was reported out of the U.S. Virgin Islands Rules and Judiciary Committee on March 21 and will be considered by the Senate on April 8.

The AICPA has indicated it is strongly committed to working with NASBA, state CPA societies and state boards, as well as individual CPAs and firms, to see these important statute updates passed in all of the remaining U.S. states and jurisdictions as soon as possible.

For more information on changes to the UAA’s definition of attest, please contact Mat Young, Vice President, State Regulatory and Legislative Affairs at