Consulting services that CPAs provided to their clients
have evolved from advice on accounting-related matters
to a wide range of services involving diverse technical
disciplines, industry knowledge, and consulting skills.
Most practitioners including those who provide audit
and tax services, also provide business and management
consulting services to their clients.
Consulting services differ fundamentally from the CPA's
function of attesting to the assertions of other parties.
In an attest service, the practitioner expresses a conclusion
about the reliability of a written assertion that is
the responsibility of another party, the asserter. In
a consulting service the practitioner develops the findings,
conclusions and recommendations presented. The nature
and scope of work is determined solely by the agreement
between the practitioner and the client. Generally,
the work is performed only for the use and benefit of
the client.
Historically, CPA consulting services have been commonly
referred to as Management Consulting Services, Management
Advisory Services, Business Advisory Services, or Management
Services. A series of Statements on Standards for Management
Advisory Services (SSMASs) previously issued by the
AICPA contained guidance on certain types of consulting
services provided by members. This statement on Standards
for Consulting Services (SSCS) supercedes the SSMASs
and provides standards of practice for a broader range
of professional services, as described in the Definitions
section below.
This SSCS and any subsequent SSCSs apply to any AICPA
member holding out as a CPA while providing Consulting
Services as defined herein.
DEFINITION:
Terms established for the purpose of the SSCSs are
as follows:
Consulting Services Practitioner.
Any AICPA member holding out as a CPA while engaged
in the performance of a Consulting Service for a client
or any other individual who is carrying out a Consulting
Services for a client on behalf of any Institute member
or member's firm holding out as a CPA.
Consulting Process: The analytical approach and process applied
in a Consulting Service. It typically involves some combination of activities
relating to determination of client objective, fact finding, definition of problems
or opportunities, evaluation of alternatives, formulation of proposed action,
communication of results, implementation and follow-up.
Consulting Services: Professional
services that employ the practitioner's technical skills,
education, observation, experiences and knowledge of
the consulting process. Consulting services include
one or more of the following:
• Consultation:
an engagement in which the practitioner's function is
to provide counsel in a short time frame, based mostly,
if not entirely, on existing personal knowledge about
the client, the circumstances, the technical matters
involved, client representation, and the mutual intent
of the parties. Example of Consultations are reviewing
and commenting on a client-prepared business plan and
suggesting computer software for further client investigation.
• Advisory Services:
an engagement in which the practitioner's function is
to develop findings, conclusions and recommendations
for client consideration and decision making. Examples
of Advisory Services are operational review and improvement
study, analysis of accounting system, assistance with
strategic planning, and definition of requirements for
an Information System.
• Implementation Services:
an engagement in which the practitioner's function is
to put an action plan into effect. Client personnel
and resources may be pooled with the practitioner's
to accomplish the implementation objectives. The practitioner
is responsible to the client for the conduct and management
of engagement activities. Examples of implementation
services are providing computer system installation
and support, executing steps to improve productivity,
and assisting with the merger of organizations.
• Transaction Services:
an engagement in which the practitioner's function is
to provide services related to a specific client transaction,
generally with a third party. Example of Transaction
Services are insolvency services, valuation services,
analysis of potential merger or acquisition and litigation
services.
• Staff and Other Support Services:
an engagement in which the practitioner's function is
to provide appropriate staff and possibly other support
to perform tasks specified by the client. The staff
provided will be directed by the client as circumstances
require. Examples of Staff and Other Support Services
are data processing facilities management, computer
programming, bankruptcy trusteeship, and controllership
activities.
• Product Services:
an engagement in which the practitioner's function is
to provide the client with a product and associated
professional services in support of the installation,
use or maintenance of the product. Examples of Product
Services are the sale and delivery of packaged training
programs, the sale and implementation of computer software
and the sale and installation of system development
methodologies.
STANDARDS FOR CONSULTING SERVICES
The general standards of the profession are as follows:
Professional Competence: Undertake
only those professional services that the member or
the member's firm can reasonably expect to be completed
with professional competence.
Due Professional Care: Exercise Due
Professional Care in the performance of professional
services.
Planning and Supervision: Adequately
plan and supervise the performance of professional services
Sufficient Relevant Data: Obtain sufficient relevant data
to afford a reasonable basis for conclusions or recommendations in relations
to any professional services performed.
The following additional general standards for all
Consulting Services are promulgated to address the distinctive
nature of Consulting Services in which the understanding
with the client may establish valid limitations of on
the practitioner's performance of services. These standards
are established under the AICPA Code of Professional
Conduct.
Client Interest: Serve the client
interest by seeking to accomplish the objectives established
by the understanding with the client while maintaining
integrity and objectivity.
Understanding With Client: Establish
with the client a written or oral understanding about
the responsibilities of the parties and the nature,
scope, and limitations of services to be performed and
modify the understanding if circumstances require a
significant change during the engagement.
Communications With Client: Inform
the client of (a) conflicts of interest that may occur
pursuant to interpretations of the AICPA Code of Professional
Conduct, (b) significant reservations concerning the
scope or benefits of the engagement and (c) significant
engagement findings or events.
Professional judgment must be used in applied Statements
on Standards for Consulting Services in a specific instance
since the oral or written understanding with the client
may establish constraints within which services are
to be provided. For example, the understanding with
the client my limit the practitioner's effort with regards
to gathering relevant data. The practitioner is not
required to decline or withdraw from a consulting engagement
when the agreed-upon scope of services includes such
limitations.
CONSULTING SERVICES FOR ATTEST CLIENTS
The performance of Consulting Services for an attest
client does not in itself impair independence. However,
members and their firms performing attest services for
a client should comply with applicable Independence
Standards, rules and regulations issued by the AICPA,
the State Board of Accountancy, State CPA Societies
and Regulatory Agencies
