American Institute of Certified Public Accountants

2007-06-02T04:28:00.001-07:00

With over 330,525 CPA members (in August 2006), the American Institute of Certified Public Accountants (AICPA) is the largest professional organization of Certified Public Accountants (CPAs) in the United States of America. Approximately 40% of its members are engaged in the practice of public accounting, in areas such as auditing, accounting, taxation, general business consulting, business valuation, personal financial planning and business technology. The majority (60%) of its members are CPAs who work in industry, government and education. However, because of the Institute's major role in self-regulation of most practicing CPAs, a large part of the Institute's resources are devoted to this function and to related programs to help CPAs maintain professional competence. The two most visible CPA practice functions are tax practice and the independent audits and similar services related to financial statements of all types of entities. Only CPAs and a now dwindling number of "grandfathered-in" non-CPA accountants are permitted to perform this audit function.

The Institute's overriding role is to promote and enhance the profession of accounting. To accomplish this, it has a variety of functions, which include: providing group member benefits; preparing the Uniform CPA Examination; developing CPA professional standards; providing technical support to CPA members in many areas of practice; operating the profession's public relations programs; providing support to the academic community and representing the profession before Congress and federal agencies.

Membership Role

Like any large membership organization, the AICPA provides a number of group insurance, buying programs and similar benefits. Its life insurance trust would be one of the nation's largest life insurance companies if it was a single company rather than a membership program.

CPA Examination

The AICPA develops the Uniform CPA Exam, one of the most respected entry-level professional licensing exams in the U.S. The test has recently been changed from an biannual two-day examination to a test that can be taken on a computer in a testing center. While each state has variations in the educational, experience and other requirements necessary to earn a CPA license, all states use the AICPA's exam to meet the entry-level testing requirement.

The AICPA also develops the International Qualification Examination (IQEX)

Professional Standards Setting

The AICPA sets generally accepted professional and technical standards for CPAs in many areas. Until the 1970s, the AICPA held a virtually monopoly in this field. In the 1970s, however, it transferred its responsibility for setting generally accepted accounting principles (GAAP) to the newly formed Financial Accounting Standards Board (FASB.) Following this, it retained its standards setting function in areas such as financial statement auditing, professional ethics, attest services, CPA firm quality control, CPA tax practice and financial planning practice. Before passage of the Sarbanes-Oxley law, AICPA standards in these areas were considered "generally accepted" for all CPA practitioners.

In the early 2000s, federal public policy makers concluded that where independent financial statement audits of public companies regulated by the U.S. Securities and Exchange Commission are concerned, that the AICPA's standards setting and related enforcement roles should be transferred to a government empowered body with more enforcement authority than a non-governmental professional association, such as the AICPA could provide. As a result, the Sarbanes-Oxley law created the Public Company Accounting Oversight Board (PCAOB) which has jurisdiction over virtually every area of CPA practice in relation to public companies. However, the AICPA retains its considerable standards setting, ethics enforcement and firm practice quality monitoring roles for the majority of practicing CPAs, who serve privately held business and individuals.

LOLO

American Institute of Certified Public Accountants

Contents

Membership Role

CPA Examination

Professional Standards Setting