Register May 2004 No. 581
Chapter Accy 1
RULES OF CONDUCT
Subchapter I — Applicability and Definitions
Accy 1.001 Applicability of rules of conduct to certified public accountants.
Accy 1.002 Applicability of rules of conduct to certified public accountants who have a significant influence over a CPA-related business or who advertise as a CPA.
Subchapter II — Independence, Integrity and Objectivity
Accy 1.101 Independence standards.
Accy 1.102 Integrity and objectivity.
Subchapter III — Competence and Technical Standards
Accy 1.201 General standards.
Accy 1.202 Auditing standards.
Accy 1.203 Accounting principles.
Accy 1.204 Other technical standards.
Accy 1.205 Standards for auditing, accounting and review services, and attestation engagements.
Subchapter IV — Responsibilities to Clients
Accy 1.301 Confidential client information.
Accy 1.302 Contingent fees, commissions and referral fees.
Subchapter V — Other Responsibilities and Practices
Accy 1.401 Acts discreditable.
Accy 1.402 Advertising or other forms of solicitation.
Accy 1.404 Incompatible occupations.
Accy 1.405 Form of practice and name.
Accy 1.406 Practice while suspended.
Accy 1.407 Communications.
Accy 1.408 Ownership requirements.
Ch. Accy 1 Note
Note: Chapter Accy 1 as it existed on June 30, 1974 was repealed and a new Chapter Accy 1 was created,
Register, June, 1974, No. 222, effective July 1, 1974.
Accy 1.001
Accy 1.001
Applicability of rules of conduct to certified public accountants. Accy 1.001(1)
(1)
Chapters Accy 1 to
9 apply to a person who practices as a certified public accountant in this state.
Accy 1.001(2)
(2) A certified public accountant may be held responsible for compliance with the rules of the examining board by any person associated with the certified public accountant in a firm who is either under his or her supervision or is a member of the firm.
Accy 1.001(3)
(3) A certified public accountant shall not permit others to carry out acts on his or her behalf, either with or without compensation, which, if carried out by the certified public accountant, would violate
chs. Accy 1 to
9.
Accy 1.001 History
History: Cr.
Register, June, 1974, No. 222, eff. 7-1-74; correction made under s. 13.93 (2m) (b) 1., Stats.,
Register, March, 1993, No. 447;
CR 03-071: r. and recr.
Register May 2004 No. 581, eff. 6-1-04.
Accy 1.002
Accy 1.002
Applicability of rules of conduct to certified public accountants who have a significant influence over a CPA-related business or who advertise as a CPA. Accy 1.002(1)(1) A person licensed as a certified public accountant that has significant influence over a CPA-related business is considered to be practicing as a certified public accountant in the CPA-related business and all persons with ownership interest in the business shall follow the rules of the examining board in the operation of the CPA-related business.
Accy 1.002(2)
(2) A person who operates a business and is licensed as a certified public accountant and who advertises or otherwise holds out as a certified public accountant shall follow the rules of the examining board in the operation of any business.
Accy 1.002 History
History: Cr.
Register, June, 1982, No. 318, eff. 7-1-82;
CR 03-071: r. and recr.
Register May 2004 No. 581, eff. 6-1-04.
Accy 1.003(1)(a)
(a) An audit or any other engagement that is performed or intended to be performed in accordance with the statements incorporated by reference in
s. Accy 1.205 (1).
Accy 1.003(1)(b)
(b) A review of a financial statement that is performed or intended to be performed in accordance with the statements incorporated by reference in
s. Accy 1.205 (2).
Accy 1.003(1)(c)
(c) An examination of prospective financial information that is performed or intended to be performed in accordance with the statements incorporated by reference in
s. Accy 1.205 (3).
Accy 1.003(2)
(2) "Audit" means an examination of financial statements of a person by a certified public accountant, conducted in accordance with generally accepted auditing standards, to determine whether, in the opinion of the certified public accountant, the statements conform with generally accepted accounting principles or, if applicable, with another comprehensive basis of accounting.
Accy 1.003(3)
(3) "Commission" means compensation, except a referral fee, for recommending or referring any product or service to be supplied by another person.
Accy 1.003(4)
(4) "Compilation of a financial statement" means a presentation of information in the form of a financial statement that is the representation of any other person without the undertaking of the certified public accountant to express any assurance on the statement.
Accy 1.003(5)
(5) "Contingent fee" means a fee established for the performance of any service according to an arrangement in which no fee will be charged unless a specified finding or result is attained, or in which the amount of the fee is otherwise dependent upon the finding or result of such service.
Accy 1.003(6)
(6) "CPA-related business" means a business that performs for clients any of the professional services related to accounting, tax, personal financial planning, or litigation support services or those services for which standards are established relating to audits, compilations and reviews of financial statements and examinations or compilations of prospective financial information.
Accy 1.003(7)
(7) "Examination of prospective financial information" means an evaluation by a certified public accountant of a forecast or projection, the support underlying the assumptions in the forecast or projection, whether the presentation of the forecast or projection is in conformity with professional presentation guidelines, or, whether the assumptions in the forecast or projection provide a reasonable basis for the forecast or projection.
Accy 1.003(8)
(8) "Firm" means a proprietorship, partnership, limited liability partnership, corporation, service corporation, or limited liability company.
Accy 1.003(9)
(9) "Forecast" means a prospective financial statement that presents, to the best of the responsible party's knowledge and belief, an entity's expected financial position, results of operations, and changes in financial position or cash flows that are based on the responsible party's assumptions reflecting conditions it expects to exist and the course of action it expects to take.
Accy 1.003(10)
(10) "Member of a firm" means a director, manager, employee, officer, owner, shareholder, principal, or partner of a firm.
Accy 1.003(11)
(11) "Person" means any natural person, firm, association, or other legal entity.
Accy 1.003(12)
(12) "Projection" means a prospective financial statement that presents, to the best of the responsible party's knowledge and belief, given one or more hypothetical assumptions, an entity's expected financial position, results of operations, and changes in financial position or cash flows that are based on the responsible party's assumptions reflecting conditions it expects would exist and the course of action it expects would be taken given such hypothetical assumptions.
Accy 1.003(13)
(13) "Referral fee" means compensation for recommending or referring any service of a certified public accountant to any person.
Accy 1.003(14)
(14) "Review" means to perform an inquiry and analytical procedures that permit a certified public accountant to determine whether there is a reasonable basis for expressing limited assurance that there are no material modifications that should be made to financial statements in order for them to be in conformity with generally accepted accounting principles or, if applicable, with another comprehensive basis of accounting.
Accy 1.003(15)
(15) "Significant influence" means the ability of an investor to exercise significant influence over operating and financial policies of an investee. The extent of ownership is not conclusive. Direct or indirect ownership of 20% or more of an investee creates a presumption that the investor has significant influence in an investee. Ownership of less than 20% of a CPA-related business creates a presumption that the certified public accountant does not have significant influence in the CPA-related business. An ability to exercise significant influence may be indicated in several ways: representation on the board of directors, participation in policy making processes, material intercompany transactions, interchange of managerial personnel, technological dependency, and the extent of ownership by an investor in relation to the concentration of other shareholdings.
Accy 1.003 Note
Note: Examples of indications that an investor may be unable to exercise significant influence over the operating and financial policies of an investee include:
