The Board proposes the rule amendment to update language concerning the certified public accountant.

DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION
Board of Accountancy

Rule No.: RULE TITLE
61H1-20.0053: Standards for Assembled Financial Statements
PURPOSE AND EFFECT: The Board proposes the rule amendment to update language concerning the certified public accountant.
SUMMARY: Language concerning the certified public accountant will be updated.
SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS: No Statement of Estimated Regulatory Cost was prepared. The Board determined the proposed rules will not have an impact on small business.
Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.
SPECIFIC AUTHORITY: 473.304, 473.315 FS.
LAW IMPLEMENTED: 473.302, 473.322 FS.
IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE SCHEDULED AND ANNOUNCED IN FAW.
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Veloria A. Kelly, Division Director, Board of Accountancy, 240 N.W. 76th Drive, Suite A, Gainesville, Florida 32607

THE FULL TEXT OF THE PROPOSED RULE IS:

61H1-20.0053 Standards for Assembled Financial Statements.

A cCertified pPublic aAccountant holding an active license may offer to perform or perform services involving assembled financial statements so long as the cCertified pPublic aAccountant complies with the standards for assembled financial statements, which are as follows:

(1) Understanding with the Entity – The cCertified pPublic aAccountant shall establish a written understanding with the entity regarding the services to be performed. This written understanding shall include a description of the nature and limitations of the services to be performed. The understanding shall also provide:

(a) No change.

(b) Disclose whether or not the entity preparing the financial statement is or is not licensed by the Florida Board of Accountancy. An example engagement letter is provided for illustrative purposes:

(Appropriate Salutation)

This letter is to confirm our understanding of the terms and objectives of our engagement to provide accounting services during (date), the output of which will be in the form of (monthly/quarterly/other frequency) assembled financial statements.

• We will perform the following services (selected illustrations):

• Assist you in recording transactions on a (monthly/quarterly/other frequency) basis.

• Prepare a trial balance from your accounts and journals.

• Assemble that information in the form of financial statements.

• Provide comments of a business advisory nature.

We do not undertake to, and will not, provide any opinion or form of assurance on the financial statements we assemble in connection with these services and, accordingly, we do not undertake to make inquiries or perform other procedures to verify, corroborate, or review information supplied by you. In addition, those statements may (will) contain departures from generally accepted accounting principles or another comprehensive basis of accounting.

Our engagement to assemble financial statements cannot be relied upon to disclose errors, fraud, or illegal acts, including fraud or defalcations that may exist. These assembled financial statements are prepared by an entity that is (is not) licensed by the Florida Board of Accountancy.

Our fees for these services. . . .

We shall be pleased to discuss this letter with you at any time.

If the foregoing is in accordance with your understanding, please sign the copy of this letter in the space provided and return it to us.

Sincerely yours,

_____________________________________

(Signature of Ccertified Ppublic Aaccountant)

Accepted and agreed to:

XYZ Company

__________________

President

__________________

Date

(2) Any cCertified pPublic aAccountant who offers to perform or performs assembled financial statements must comply with the provisions of Rule 61H1-22.001, F.A.C.

(3) Language or style similar to that used in reports as defined in Rule 61H1-20.009, F.A.C., shall be avoided to reduce any possible risk of misunderstanding.

(3)(4) Assembled financial statements are not prepared with an expression of any form of opinion or assurance.

(4)(5) No change.

(5)(6) Before issuing the transmittal letter, the cCertified pPublic aAccountant shall read the assembled financial statements and consider whether such financial statements appear to be free from obvious material errors. In this context, the term error refers to mistakes in the assembly of financial statements, including arithmetical or clerical mistakes.

(6)(7) No change.

(7)(8) The transmittal letter shall include the name and license number of the cCertified pPublic aAccountant who offers to perform or performs services involving assembled financial statements. If more than one cCertified pPublic aAccountant offers to perform or performs such services, then the name and license number of the cCertified pPublic aAccountant who assumes responsibility for the statements shall be included. If a Licensed Audit Firm or Public Accounting Firm offers to perform or performs such services, the name and license number of the firm may be utilized instead of the name and license number of an individual cCertified pPublic aAccountant.

(8)(9) No change.

(9)(10) If the Licensed Audit Firm, cCertified pPublic aAccountant or the cCertified pPublic aAccountant employer’s is not independent, as defined in Rule 61H1-20.001, F.A.C., the transmittal letter shall disclose the lack of independence.

(10)(11) Transmittal letters may include comments of a business advisory nature to which the cCertified pPublic aAccountant wishes to draw the client’s attention.

(11)(12) An example standard transmittal letter is provided for illustrative purposes:

(Date)

These assembled financial statements for XYZ Company as of (date) are prepared without an expression of any form of opinion or assurance and they are prepared by an entity that is (is not) licensed by the Florida Board of Accountancy.

(Comments of a business advisory nature may be included in a separate paragraph(s).

_________________________________

(Signature of Licensed Audit Firm), or

______________________________________________

(Signature of Active Certified Public Accountant Licensee)

__________________________________

(State of Issuance and License Number)

Rulemaking Specific Authority 473.304, 473.315 FS. Law Implemented 473.302, 473.322 FS. History–New 10-28-98, Amended 9-20-00, 8-28-06,________.

NAME OF PERSON ORIGINATING PROPOSED RULE: Board of Accountancy
NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Board of Accountancy
DATE PROPOSED RULE APPROVED BY AGENCY HEAD: July 17, 2009
DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAW: July 31, 2009