The American Institute of CPAs has proposed new standards to build more rigorous oversight of CPA financial planners.
The new standards are based on the AICPA Statement on Responsibilities in Personal Financial Planning Practice, which was adopted more than 20 years ago to provide a framework to help CPAs deliver financial planning services with high integrity. Substantive guidance and minimum guidelines for professional behavior were issued between 1992 and 1996 by the PFP Executive Committee as five separate statements, Statements on Responsibilities in Personal Financial Planning Practice. The statements were vetted by the membership through the exposure process before being issued. The main objective was to provide process-based guidance when planning, developing, presenting, implementing, monitoring and updating a financial plan to protect both the public and the CPA planner.
In December 2010, a revised Statement on Responsibilities in PFP Practice was issued, combining the five statements into one and adding illustrations to provide greater relevance. They have been adopted by seven state boards of accountancy as a required standard.
To establish clearer, definitive rules with broad applicability and enforceability, the AICPA’s governing council in October awarded the executive committee of the personal financial planning division the authority to set standards. The committee has approved the draft standards—covering planning engagements, working with other service providers and other matters—that will apply to all AICPA members who provide personal financial planning services and do any of the following: represent that they provide personal financial planning services; engage in activities that require registration as an investment adviser under federal or state law; or sell a product as a result of an engagement.
“Amid the complexity and uncertainty of today’s economy, more clients are turning to their CPAs for guidance on a broader array of financial issues,” said AICPA Personal Financial Planning Executive Committee chairman Lyle K. Benson in a statement. “That’s because the CPA-client relationship is built on trust rooted in the most stringent ethical, professional and regulatory requirements. We have drafted these standards to continue raising the bar, ensuring that CPAs deliver the highest level of professionalism, integrity, objectivity and competency in the financial planning profession.”
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