Chapter Accy 1

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.

Accy 1.003   Definitions.

Subchapter II — Professional Conduct, Integrity,
and Objectivity

Accy 1.101   Professional conduct.

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   Firm Names.

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 Accy 1 Note Note: Chapter Accy 1 as it existed on June 30, 1974 was repealed and a new Chapter Accy 1 was created, Register, June, 1974, No. 222, effective July 1, 1974.

subch. I of ch. Accy 1 Subchapter I — Applicability and Definitions

Accy 1.001 Accy 1.001 Applicability of rules of conduct to certified public accountants.

Accy 1.001(1) (1) Chapters Accy 1 to 6 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 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 the accountant’s behalf, either with or without compensation, which, if carried out by the certified public accountant, would violate chs. Accy 1 to 6.

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; 2015 Wis. Act 217: am. Register May 2016 No. 725, eff. 6-1-16.

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 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 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; 2015 Wis. Act 217: am. Register May 2016 No. 725, eff. 6-1-16.

Accy 1.003 Accy 1.003 Definitions. As used in chs. Accy 1 to 6:

Accy 1.003(1) (1) “Attest service” means any of the following, if performed or intended to be performed in accordance with the statements incorporated under s. Accy 1.205:

Accy 1.003(1)(a) (a) An audit or any other engagement.

Accy 1.003(1)(b) (b) A review or compilation of a financial statement.

Accy 1.003(1)(c) (c) An examination of prospective financial information.

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(2m) (2m) “Board” means the accounting examining board.

Accy 1.003(2r) (2r) “Certified public accountant” or “CPA” means a person considered to be in practice as a certified public accountant under s. 442.02, Stats.

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(7m) (7m) “Financial statements” means statements and footnotes related thereto that undertake to present an actual or anticipated financial position as of a point in time, or results of operations, cash flow, or changes in financial position for a period of time, in conformity with generally accepted accounting principles or another comprehensive basis of accounting. “Financial statements” does not include incidental financial data included in management advisory service reports to support recommendations to a client; nor does it include tax returns and supporting schedules.

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.