Glossary of terms

The following glossary is intended to clarify the statutory obligations of CPAs and define some of the regulatory bodies and financial terms.

Accountancy Board of Ohio

The Board's primary function is that of a regulatory agency that monitors compliance with the accountancy law and Board regulations governing the practice of public accounting. Board investigations are of four types: (1) failure to comply with individual license requirements, (2) failure to comply with firm registration and peer review requirements, (3) the unlawful practice of public accounting, and (4) complaints from the general public against CPAs and CPA firms.

AICPA—American Institute of Certified Public Accountants

With more than 330,000 members, the AICPA is the national professional organization for all Certified Public Accountants (CPAs). Its mission is to provide members with the resources, information, and leadership that enable them to provide valuable services in the highest professional manner to benefit the public as well as employers and clients. In fulfilling its mission, the AICPA works with state CPA organizations and gives priority to those areas where public reliance on CPA skills is most significant.

The AICPA is responsible for establishing and enforcing a code of professional conduct for its members and auditing and attestation standards for non-public companies in the United States. It is also responsible for establishing and administering quality monitoring (or peer review) programs for CPA firms that perform auditing and other attest services for non-public companies.

Accountant

Although all CPAs have a background in accounting, not all accountants are CPAs. CPAs are licensed to practice accountancy under state law. Only licensed accountants in Ohio can perform attest services such as an audit, review or compilation of financial statements. The SEC also requires that the signatory of the independent auditors report in an SEC filing be “dually registered” with the appropriate state licensing authority.

Adverse Opinion

Auditor’s opinion which states that financial statements do not fairly present the financial position, results of operations, or cash flows in conformity with generally accepted accounting principles.

Agreed Upon Procedures

Specific procedures agreed to by a CPA, a client and (usually) a specified third party. The report states what was done and what was found. Additionally, the use of the report is restricted to only those parties who agreed to the procedures.

Analytical Review Procedures

Substantive tests of financial information made by a study and comparison of relationships among data.

Assurance Services

Services which improve the quality of information, or its context, for decision-makers.

Attestation Standards (AT)

The attestation standards enable practitioners to examine or review non-financial statement information and to perform and report on the results of those engagements in accordance with professional standards.

Audit

Webster’s Seventh New Collegiate Dictionary defines an “audit” as “a methodical examination and review” or, more specifically, “the final report of an examination of books of account by auditors.” 

The Securities Acts of 1933 and 1934 require the financial statements of all publicly-held companies in the United States to be audited every year by an independent auditor. The SEC subsequently mandated that the annual report of every publicly held corporation contain a Report of Independent Public Accountants. The standard audit report states that the goal of the audit is “to obtain reasonable assurance that the financial statements are free of material misstatement” and that the audit was performed “in accordance with generally accepted auditing standards.” The federal government subsequently expanded mandatory audit requirements to most pension plans, local and state governments, and certain not-for-profit organizations. Audits by CPAs also have become part of many real estate and other commercial agreements, as well as many bank loan requirements.

Audit Committee

Audit committees of boards of directors have become a well-recognized and important element of corporate governance. Ideally, these committees should consist of individuals who are independent of the management of the entity and have a strong degree of financial literacy. Audit committees typically recommend the CPA or firm to be hired as independent auditors and have oversight responsibilities for both the internal audit function and the independent audit. The SEC requires publicly-held companies to include reports by their audit committee in proxy statements. Auditing standards require certain communications between the audit firm and the audit committee.
 
Audit Risk

The risk that an auditor will unknowingly fail to appropriately modify his/her opinion on financial statements that are materially misstated.

Audit Sampling

The application of an audit procedure to less than 100 percent of the items within an account balance or class of transactions for the purpose of evaluating some characteristic of the balance or class.

Auditing Standards Board (ASB)

The 15-member Auditing Standards Board (ASB), a senior technical committee of the AICPA, issues auditing standards and procedures that must be observed by all CPAs when conducting financial statement audits for non-public companies.

Big Four

Traditionally, the four largest CPA firms in the world. They are: PricewaterhouseCoopers; Deloitte & Touche LLP; Ernst & Young LLP; and KPMG.

Business Valuation (BV)

Refers to the discipline involving a process by which a supportable opinion is derived about the worth of a business or individual assets or liabilities.

Cascade

The cascade of Sarbanes-Oxley Act (SOX) is the extension of provisions contained in SOX that apply only to SEC registrants and their auditors to private companies and not for profit organizations and their CPA firms.

Center for Public Company Audit Firms

The AICPA Center for Public Company Audit Firms will enhance the quality of performance of members that audit public companies and provide support for them by:

• Developing technical and educational guidance. 
• Serving as a forum for member firms to express their views on technical and regulatory matters. 
• Administering a peer review program for member firms that will focus on the audits of nonpublic entities.

Certified Public Accountant (CPA)

A credential conferred by a state or similar governmental jurisdiction that authorizes the holder to practice as a Certified Public Accountant in that jurisdiction. In order to become a CPA, all states require that an individual meet some combination of educational, experience, and ethical requirements and pass the Uniform CPA Examination.

Chartered Accountant (CA)

Professional accounting designation used in the United Kingdom, Canada and several other countries.

Compilation

Information presented in the form of financial statements that is the representation of management without the accountant undertaking to express any assurance on the statements.

Computer-based Test

Term sometimes used to refer to the Uniform CPA Examination. The Uniform CPA Examination is delivered in a computerized format, almost year-round, at test centers across the United States. Go to www.cpa-exam.org for information about the CPA Examination, applying, and scheduling.

Consulting Services (CS)

Consulting Services provided by CPA firms in addition to the traditional audit, accounting, and tax services (e.g. systems work, production planning).

Continuing Professional Education (CPE)

An integral part of the life-long learning required for the CPA to provide competent service to the public. The set of activities that enables accounting professionals to maintain and increase their professional competence.

Contingencies

The notes to financial statements describe certain uncertainties as to possible gain or loss, called “contingencies," that will ultimately be resolved when one or more future events occur or fail to occur. These might include, for example, uncertainties as to the outcome of pending or threatened litigation, or guarantees of the indebtedness of others that could have an effect on the financial position or performance of the organization.

Customer Relationship Management (CRM)

A business management system that involves all aspects of interaction an organization has with its customer or member, including all marketing, communications, sales and service related activities. The overall objective of CRM effort is to develop a 360 degree view of a member/customer

Disclaimer of Opinion

Auditor’s statement in which he (she) does not express an opinion on financial statements.

Disclosure

The material matters relating to the form, arrangement, and content of financial statements that are “disclosed” during the presentation of financial statements in accordance with generally accepted accounting principles, or, if applicable with Other Comprehensive Basis of Accounting (OCBOA).

Discussion Memorandum (DM)

Document sometimes issued for public comment to assist an authoritative body in formulating an exposure draft.

ElderCare Services

A host of financial and non-financial services targeted at older adults and their family members to help those older adults maintain their independence for as long as possible and to provide peace of mind for their family members.

Emerging Issues Task Force (EITF)

The EITF was designed to promulgate implementation guidance within the framework of existing authoritative literature to reduce diversity in practice on a timely basis. The EITF was designed to minimize the need for the FASB to spend time and effort addressing narrow implementation, application, or other emerging issues that can be analyzed within existing GAAP.

Employee Retirement Income Security Act of 1974 (ERISA)

A federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans. ERISA requires plans to provide participants with plan information including important information about plan features and funding; and requires plans to prepare financial reports and have annual audits generally for plans with more than 100 participants.

Enhanced Business Reporting (EBR)

Enhanced Business Reporting is comprised of voluntary, globally recognized guidelines for providing richer disclosure of business information, allowing companies to better communicate current and expected performance while giving the investment community and other stakeholders the information they need to make better decisions. This includes financial statements, key performance indicators based on industry-specific definitions, and company-specific information about strategy, plans, opportunities and risks.

Enrolled Agent

A tax practitioner who, by passing an examination given by the U.S. Treasury Department, can represent taxpayers before the Internal Revenue Service.

Enterprise Resource Planning (ERP)

A business management system that integrates all facets of the business to the related financial reporting functionality. Software applications have emerged to help business managers implement ERP in business activities such a planning, manufacturing, sales, marketing, inventory control, order tracking, and finance. ERP attempts to integrate all departments and functions across a company to create a single software program that runs off one database.

Evidential Matter

Audit materials supporting the financial statements consisting of the underlying accounting data and all corroborating information available to the auditor.

Exposure Draft (ED)

Document issued by the AICPA, Financial Accounting Standards Board (FASB), Governmental Accounting Standards Board (GASB), Federal Accounting Standards Advisory Board (FASAB), or other authority to invite public comment before a final accounting, auditing, or administrative standard, policy or procedure pronouncement is issued.

Extensible Business Reporting Language (XBRL)

Formerly code named XFRML, XBRL is a freely available electronic language for financial reporting. It is an XML-based framework that provides the financial community a standards-based method to prepare, publish in a variety of formats, reliably extract and automatically exchange financial statements of publicly held companies and the information they contain. XBRL is not about establishing new accounting standards but enhancing the usability of the ones that we have through the digital language of business. XBRL will not require additional disclosure from companies to outside audiences.

Financial Accounting Standards Board (FASB)

A private sector body that sets accounting standards (referred to as generally accepted accounting principles (GAAP), the ground rules for the preparation of financial statements for non-governmental entities in the United States. The SEC requires all publicly-held companies to follow the rules set out in FASB pronouncements. Issues deliberated by the FASB include everything from broad concepts such as when revenue should be recognized in financial statements, to more specific rules such as what information should be reported about a company's different businesses and how pension liabilities should be measured.

Financial Statements

Financial statements present information about an entity's economic resources and obligations at a point in time, the results of its activities during a particular period, and its sources and uses of cash during that period. They focus on information that is useful in making investment and lending decisions.  Most financial statements are prepared using a set of common ground rules, which have been developed over a period of many years, and are called generally accepted accounting principles (GAAP).

Firm-on-Firm Team Review (FOF)

A peer review team formed by a CPA firm engaged to conduct the peer review of another CPA firm.

Government Accountability Office (GAO)

The GAO is the investigative arm of Congress. It exists to support Congress in meeting its constitutional responsibilities and to help improve the performance and accountability of the federal government. Among its activities are examining the use of public funds, evaluating federal programs and activities, and providing analysis, options, recommendations, and other assistance to help Congress make effective oversight, policy, and funding decisions.

Generally Accepted Accounting Principles (GAAP)

GAAP encompasses the conventions, rules, and procedures necessary to define accepted practice in the preparation of financial statements in the U.S. The SEC has the statutory authority to set accounting standards for publicly held companies but historically has relied, without abdicating its responsibilities, on private sector bodies to set those standards. The Financial Accounting Standards Board (FASB) is currently the private-sector body with the primary authority to establish GAAP for all non-governmental entities.

Generally Accepted Auditing Standards (GAAS)

GAAS are the standards governing the conduct of independent audits of non-public companies by CPAs, as determined by the Auditing Standards Board (ASB) of the AICPA.

Government Auditing Standards, a.k.a Generally Accepted Government Auditing Standards (GAGAS)

Commonly referred to as the “Yellow Book,” it contains standards for audits of government organizations, programs, activities, and functions, and of governmental funds received by contractors, nonprofit organizations, and other non-government organizations. Revisions are issued as required by the Comptroller General of the U.S.

Governmental Accounting Standards (GAS)

Official promulgations by the Governmental Accounting Standards Board (GASB) and, if not superseded, part of generally accepted accounting principles applicable to state and local governmental entities.

Governmental Accounting Standards Board (GASB)

Group authorized by the accounting profession to establish generally accepted accounting principles (GAAP) applicable to state and local governmental entities.

Inspector General (IG)

Individuals charged with conducting and supervising audits and investigations relating to the programs and operations of their departments or agencies, and reporting on these semiannually to Congress and the chief executive of their department or agency. Such offices were established in most federal cabinet-level departments and larger agencies by the Inspector General Act of 1978.

Internal Revenue Bulletin (IRB)

Authoritative instrument of the Commissioner of Internal Revenue for announcing official rulings and procedures of the IRS, and for publishing Treasury decisions, executive orders, tax conventions, legislation, court decisions, and other items of general interest. It is published weekly.

Issuer

The term means an issuer as defined in section 3 of the Securities Exchange Act of 1934 (15 U.S.C.78c). The securities of which are registered under section 12 of that Act (15 U.S.C.78l), or that is required to file reports under section 15(d) (15 U.S.C 78o (d)), or that files or has filed a registration statement that has not yet become effective under the Securities Act of 1933 (15 U.S.C. 77a et seq.) and that it has not withdrawn.

Issues Papers

Materials which provide information on financial accounting and reporting issues that the Institute believes the Financial Accounting Standards Board (FASB) or Governmental Accounting Standards Board (GASB) should consider and on which those organizations should provide guidance.

Joint Ethics Enforcement Program (JEEP)

Program of cooperation between the AICPA and the state CPA societies in the enforcement of the Code of Professional Conduct.

Knowledge Management (KM)

The process of connecting people to people and people to information to create competitive advantage.

Letters of Comment (LOC)—Peer Review

For system reviews within the AICPA Peer Review Program, comments and recommendations issued by the review team if there are matters that the review team believes resulted in conditions being created in which there was more than a remote possibility that the firm would not conform with professional standards on accounting and auditing engagements in all material respects, but were not of such significance to cause the report to be modified or adverse. For engagement reviews within the AICPA Peer Review Program, comments and recommendation issued by the review team if there are departures from professional standards that are not deemed to be significant but that should be considered by the reviewed firm in evaluating the quality control policies and procedures over its accounting practice.

Letters of Response (LOR)—Peer Review

A written response from the reviewed firm addressed to the entity administering the Peer Review Program which describes the actions taken or planned by the reviewed firm with respect to each matter in the letter of comments.

LEXIS

Computer-assisted legal research service which offers access to several other services, including the National Accounting Automated Research System (NAARS) and NEXIS.

Limited Liability Company (LLC)

A form of organization that may be treated as a partnership for federal tax purposes and that has limited liability protection for the owners at the state level. The entity may be subject to state franchise tax as a corporation.

Limited Liability Partnership (LLP)

A form of organization in which the individual partners are protected from the liabilities of the other partners. These entities are considered partnerships for both federal and state tax purposes.

Litigation Services (LS)

Any professional guidance non-lawyers provide to lawyers in the litigation process. Such assistance may include the quantification of damages, analysis of business facts and the provision of expert testimony.

Management of an Accounting Practice (MAP)

Guidance provided to small firms and sole proprietors in improving the management and administration of their practices.

MD&A Section in Annual Reports

The Management Discussion and Analysis (MD&A) section of a company’s quarterly or annual report is required by the SEC for all public companies. MD & A disclosures should include in plain English, management’s identification and evaluation of all information, including the potential effects of known trends, commitments, events and uncertainties, that is important to providing investors and others with an accurate understanding of the company’s current and prospective financial position and operating results. The three required elements in MD&A are: results of operations, liquidity, and capital resources. MD&A also is required to include a discussion of instances where optional accounting treatments were available and the reason for the treatment chosen.

National Accreditation Commission (NAC)

Senior AICPA committee that recommends and implements specialization/certification programs for CPAs and oversees existing accreditation programs.

National Association of State Boards of Accountancy (NASBA)

National organization representing the 54 state licensing boards/agencies which regulate the CPA profession in all states and four U.S. territories.

Negative Assurance

An accountant’s statement which says that as a result of specified procedures, nothing came to his (her) attention that caused him (her) to believe that specified matters did not meet a specified standard.

NEXIS

Full-text research and information service with a database of more than 160 U.S. and overseas general, business, and news information sources.

Nonissuer

Entities not subject to the Sarbanes-Oxley Act of 2002 or the rules of the SEC.

Office of Management and Budget (OMB)

Federal government agency responsible for assisting the President in preparing the budget and formulating the fiscal program of the U.S. government, among other things. Also responsible for overseeing audits performed under single audit set and OMB circular A-133, audits of states, local governments and non-profits organizations.

The Ohio Society of CPAs

The Ohio Society of Certified Public Accountants is a dynamic professional organization comprised nearly 24,000 CPAs working together to advance the accounting profession and to serve the public interest. Founded in 1908, The Ohio Society of Certified Public Accountants is among the oldest and largest CPA organizations in the United States and has an outstanding record of service to its members. The Society's membership consists of CPAs who practice in public accounting, industry, education and government.

The mission of The Ohio Society is to act on behalf of its members and provide the support necessary to ensure that members serve the public interest by providing quality services. Membership in The Ohio Society of CPAs affords services such as governmental representation, continuing professional education, peer review and many more.

Membership in the Ohio Society of CPAs is voluntary and members must adhere to a strict code of conduct. The CPA profession does not take lightly its special responsibilities for self-regulation. The Ohio Society of CPAs’ Code of Professional Conduct clearly identifies that CPAs must use integrity, objectivity, independence and diligence in serving the public interest. The Code is based on the profession’s recognition of its responsibilities to the public, to clients and to colleagues.

Other Comprehensive Basis of Accounting (OCBOA)

A basis of accounting, other than GAAP, that an entity uses to report its assets, liabilities, equity, revenues and expenses. Examples of OCBOA include income tax basis and cash basis of accounting.

Peer Review

Peer review is a periodic outside review of a firm’s quality control system in accounting and/or auditing. Its aim is to maintain and improve the quality of the accounting and/or auditing services performed by firms. A firm has a peer review every three years by another firm of comparable size. Peer review is a statutory requirement for all Ohio CPA firms that provide attest services (audit, review or compilation), as well as a membership requirement for both The Ohio Society of CPAs and the American Institute of CPAs. The Ohio Society's Peer Review Committee serves as the authorized agent of the Accountancy Board of Ohio for peer reviews in the state. 

Ohio accounting firms that provide audits for SEC regulated companies are required to participate in the inspection program of the Public Company Accounting Oversight Board (PCAOB). The PCAOB inspection does not relieve the CPA firm of its peer review requirement under Ohio law. Ohio accounting firms that audit SEC registrants may participate in the Ohio Society of CPAs peer review program or the AICPA's Center for Public Company Audit Firms peer review program. The AICPA and Ohio Society peer review programs are both conducted under standards established by the AICPA's Peer Review Board.

The results of the most recent peer review for firms that audit SEC registrants are publicly available. Each public file also includes the firm's peer review report and, if applicable, a comment letter identifying matters for improvement, the firms’ response to such a letter, and a description of any follow-up action deemed necessary.

Personal Financial Planning (PFP)

Process of addressing a client’s financial concerns in the context of his (her) overall financial situation. The Ohio Society of CPAs provides its members with a special interest in advising clients on the planning and management of their personal finances with information and continuing education opportunities.

Political Action Committee (PAC)

Group of individuals with common interests and political goals that is organized to provide information and financial support to candidates for elective offices. The Ohio Society of CPAs has a PAC.

Practice Bulletin

Information communicating the views of the Accounting Standards Executive Committee on certain narrow accounting issues.

Pre-certification Education Executive Committee (PcEEC)

The AICPA committee that recommends education policy to the Board and provides assistance to the academic community in preparing students for entry into the profession and supports the recruitment of talented students into the profession.

Private Company Financial Reporting

An initiative of the AICPA to determine if, and where, privately-held companies have a need for different accounting standards than publicly-traded companies, and if so, to work to create those standards. This initiative is currently focused on working collaboratively with the FASB to meet the needs of companies, users of financial reporting and the CPAs who serve these clients.

Public Company Accounting Oversight Board (PCAOB)

The PCAOB is an a regulatory body created by the Sarbanes-Oxley Act of 2002, which regulates audits of SEC registrants. Operating under the U.S. Securities and Exchange Commission, the PCAOB has the authority for registration, inspection, and discipline of firms auditing SEC registrants, and sets standards for public company audits.

Public Company Auditors’ Forum

Technical and educational resource and public policy voice for U.S. audit firms that are registered with PCAOB.

Public Accountant (PA)

Generic term for persons/firms which practice public accounting but are not CPAs. Some states license public accountants.

Public Entity

Any entity that: (a) trades securities in a public market either on a stock exchange or in the over-the-counter market; (b) makes a filing with a regulatory agency in preparation for the sale of any classes of its securities in a public market; (c) is a subsidiary, corporate joint venture, or other entity controlled by either (a) or (b).

Qualified Opinion

Auditor’s opinion which states that, except for the effects of the matter to which a qualification relates, the financial statements fairly present financial position, results of operations, cash flows in conformity with generally accepted accounting principles.

Registered Investment Adviser (RIA)

According to the Securities and Exchange Commission, an individual registered under the Investment Advisers Act of 1940, who, for compensation, engages in the business of advising others as to the value of securities or as to the advisability of investing in, purchasing, or selling securities.

Regulatory Accounting Principles (RAP)

The term regulatory accounting principles denotes the requirements or methods of accounting and reporting specified by regulatory agencies for supervisory reporting purposes. The AICPA encourages consistency between GAAP and RAP.

Report Acceptance Body (RAB)

Peer Review Committee members from approved state CPA society administering entities that discuss and accept peer review reports and other peer review related documents for firms enrolled in the AICPA Peer Review Program.

Revenue Procedure

A published official statement of the IRS regarding a matter of federal tax procedure, published by the National Office of the IRS.

Revenue Ruling

A published official interpretation of the tax law by the National Office of the IRS. Rulings are often based on replies to request for rulings by taxpayers.

Review

Performing inquiry and analytical procedures that provide the accountant with a reasonable basis for expressing limited assurance that there are no material modifications that should be made to the financial statements for them to be in conformity with GAAP or, if applicable, with OCBOA.

Risk Advisory Services

Services designed to identify, assess and manage risks of an entity and measure and monitor the risk management strategies implemented by that entity.
 
Securities and Exchange Commission (SEC)

The SEC was established by the Securities Act of 1933 and the Securities Exchange Act of 1934. These laws were passed by Congress and signed by President Roosevelt in response to the vast sums lost by investors in the stock market crash of 1929 and the subsequent financial depression. 

The expressed purpose of the SEC is to protect investors of publicly held companies and to maintain the integrity of the securities markets. According to the SEC’s Web site, its main purpose can be summed up in two common-sense notions:

• Companies publicly offering securities for investment dollars must tell the public the truth about their businesses, the securities they are selling, and the risks involved in investing.
• People who sell and trade securities – brokers, dealers and exchanges—must treat investors fairly and honestly, putting investors' interests first.

Shared Services LLC

A joint venture between the AICPA and the State Society Network Inc. to take advantage of operational cost efficiencies among the similar organizations that serve CPAs.

Special Purpose Entities (SPEs)

SPE is used to refer to an entity such as a corporation or partnership created to conduct a specific transaction or business activity. The vast majority of SPEs are used for legitimate purposes. For example, mortgage and credit companies use them to sell loans and other obligations to private investors, multinational corporations use them in tax planning strategies, and consumer product companies use them to allow third parties (the SPEs) to act as their consumer finance company.
 
All of the assets and liabilities of an SPE (except for certain qualified entities typically used for the securitization of assets such as loans), that are legally separate from the reporting organization:

• must be included among the assets and liabilities of the reporting entity, if 
• the reporting entity has a controlling financial interest in that legally separate entity.

This is referred to as “consolidation.” In addition, the beneficiary of the transaction or business activity entered into by an SPE may be required to consolidate the SPE:

• even in the absence of a controlling financial interest in the SPE (indeed, even if the reporting entity has no ownership interest in the SPE) if, 
• certain other conditions are met. 

The “3-percent rule” that has been referred to in the press is an element of a publicly-stated SEC staff view concerning when one of those other conditions would be met.

Statement of Position (SOP)

Statements which provide guidance on practice or industry financial accounting or reporting problems until the Financial Accounting Standards Board or Governmental Accounting Standards Board provides standards in those areas. They are also intended to influence the establishment of such standards, and to update, revise, or clarify audit and accounting guides or provide freestanding guidance.

Statements on Auditing Standards (SAS)

Statements issued by the Auditing Standards Board to provide CPAs with guidance regarding the application of Generally Accepted Auditing Standards (GAAS).

Statements of Federal Financial Accounting Standards (SFFAS)

Official promulgations by the Federal Accounting Standards Advisory Board (FASAB) and, if not superseded, part of generally accepted accounting principles applicable to federal governmental entities.

Statements on Standards for Accountants’ Services on Prospective Financial Information (SSASPFI)

Statements issued by the Auditing Standards Board to provide guidance to accountants concerning performance and reporting for engagements to examine, compile, or apply agreed-upon procedures to prospective financial statements.

Statements on Standards for Accounting and Review Services (SSARS)

Statements issued by the Accounting and Review Services Committee to provide CPAs with guidance regarding reporting on the unaudited financial statements or other unaudited financial information of nonpublic entities.

Statements on Standards for Attestation Engagements (SSAE)

Statements issued by the Auditing Standards Board, Accounting and Review Services Committee, or the Management Advisory Services Executive Committee to provide guidance to CPAs engaged to perform attest services.

Substantial Equivalency

A concept that provides greater ease of mobility across state lines for CPAs both in person and electronically. Under this concept, if a CPA has a license in good standing from a state that utilizes CPA certification criteria that are essentially those outlined in the UAA, then the CPA would be qualified to practice in that state without a reciprocal license.

Successor Auditor

An auditor who has accepted an engagement or an auditor who has been invited to make a

Technical Bulletin (TB)

Information issued by the Financial Accounting Standards Board which provides timely guidance on certain financial accounting and reporting problems.

Transaction Trail

Chains of evidence provided through coding, cross references, and documentation connecting accounting balances and other summary results with original transactions and calculations.

Uniform Accountancy Act (UAA)

The Uniform Accountancy Act is a single comprehensive piece of model legislation that seeks to eliminate differing requirements on issues including CPA certification, reciprocity, and temporary practice by promoting uniformity in state accountancy licensing laws. Uniformity would be achieved by adopting the UAA in place of existing laws in the 55 American licensing jurisdictions. The AICPA and the National Association of State Boards of Accountancy (NASBA) published the first joint model bill, later renamed the Uniform Accountancy Act (UAA), in 1984.

Unqualified Opinion

An auditor’s opinion which states that the financial statements present fairly, in all material respects, financial position, results of operations, cash flows in conformity with generally accepted accounting principles.

Vision

CPAs are the trusted professionals who enable people and organizations to shape their future. Combining insight with integrity, CPAs deliver value by communicating the total picture with clarity and objectivity, translating complex information into critical knowledge, anticipating and creating opportunities, and designing pathways that transform vision into reality.

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