Big news from CBA if the highest level of service you provide clients is a preparation engagement.
First, if you don’t perform compilations, reviews, audits, or other services covered by peer review, you don’t need to get a peer review.
Second, there is a specific CPE requirement: 4 hours in fraud education and 8 hours in prep or A&A.
The following article from the California Board of Accountancy, quoted with permission, provides more detailed explanation. Since it is quoted verbatim, I won’t put quotes around the entire article.
NEW CONTINUING EDUCATION REQUIREMENT FOR PREPARATION ENGAGEMENTS
CPAs who perform preparation engagements as their highest level of service are subject to a new continuing education (CE) requirement.
Effective October 1, 2017, if you perform preparation engagements as your highest level of service, as part of your required 80 hours of CE, you must complete eight hours of preparation engagement or accounting and auditing (A&A) CE and four hours of CE specifically related to the prevention, detection, and/or reporting of fraud affecting financial statements. Additionally, if you perform preparation engagements as your highest level of service, you will not be required to undergo a peer review. However, you would still be required to complete the Peer Review Reporting Form as part of the license renewal requirement.
What is a preparation engagement? Statement on Standards for Accounting and Review Services No. 21 (SSARS 21), section 70 – Preparation of Financial Statements, describes a preparation engagement as an accountant in public practice engaged to prepare financial statements but is not engaged to perform an audit, review, or compilation on those financial statements. An engagement to prepare financial statements is a non-attest service and not subject to peer review. The accountant is not required to be independent and no report is required. Each page of the financial statement is required to clearly state that ‘no assurance is provided’ or another form of disclaimer stating the accountant did not perform an audit, review, or compilation.
To view the new regulation, please visit www.cba.ca.gov, select the “About the CBA” link, click on “Laws and Rules,” then select “Continuing Education – Preparation Engagement” under “Newly Enacted Regulations.” If you have any questions regarding the preparation engagement CE requirement or the license renewal process, please contact the License Renewal and Continuing Competency Unit at (916) 561-1702 or firstname.lastname@example.org.
Reprinted with permission from the California Board of Accountancy, UPDATE Issue #85 – www.cba.ca.gov.
CBA social media outreach
If you are licensed in California and you are not paying close attention to the CBA, might be worth your while to tune in. I have noticed over the years that CBA puts a lot of effort into getting news out to CPAs and consumers about regulatory matters.
You could check them out at: