AICPA proposes new forensic accounting standards

Register now

The American Institute of CPAs proposed new professional standards Thursday for forensic accounting engagements.

The proposed Statement on Standards for Forensic Services No. 1 aims to provide more tailored authoritative guidance to CPAs who perform forensic accounting services. The proposed SSFS 1 standards would classify forensic engagements as services provided for “investigation” or “litigation” as follows:

• It would identify an investigation as services performed in response to concerns of wrongdoing in which the member is engaged to perform procedures to collect, analyze, evaluate or interpret evidence to assist in reaching a conclusion on the merits of the concerns.

• Litigation would be classified as an actual or potential legal or regulatory proceeding before a trier of fact or a regulatory body — as an expert, consultant, neutral, mediator, or arbitrator — in connection with the resolution of disputes between parties. As defined in the standard, litigation does not need to be formal and includes alternative dispute resolution forums.

The proposal, developed by the AICPA’s Forensic and Valuation Services (FVS) Executive Committee, also includes prohibitions on providing legal opinions and performing certain forensic services for a contingent fee. In addition, it provides more tailored authoritative guidance to AICPA members who perform forensic services.

The AICPA pointed out that employment in the forensic accounting field grew at an annual rate of 18 percent from 2012 to 2017, according to the market research firm IBISWorld, and continued growth is expected in the years ahead. With the increasing demand for forensic accounting, the development of a standard should improve consistency and quality.

SSFS 1 would apply to all AICPA members, AICPA member firms and employees of AICPA member firms. All CPAs would need to follow the relevant laws, rules and standards when performing any forensic accounting engagement.

The proposal would take effect for any new engagements accepted on or after May 1, 2019, with early adoption permitted. The AICPA has posted a set of frequently asked questions and answers about SSFS 1 online and is asking for comments from AICPA members and member firms, and other stakeholders, until Feb. 28, 2019. To send a comment, email

More information and resources for CPAs involved in forensic services can be found in the AICPA’s FVS Section page.

For reprint and licensing requests for this article, click here.
Forensic accounting Accounting standards Accounting firm services Litigation AICPA