Yes, you can serve your community. Just know the rules!

CPAs have valuable skills and abilities that can be incredibly beneficial to nonprofit organizations, from large charity groups to church boards of trustees to parent-teacher organizations. If you’re asked to serve, don’t be scared about the effect on your license status. There’s lots of guidance available to help you determine what you can and can’t do.

Because the Virginia Board of Accountancy (VBOA) frequently received inquiries from CPAs about providing volunteer services, it updated its guidance and included an infographic so licensees can visually determine what services they can provide. Some details are provided below, but the full guidance and infographic can be found at here.

Define the type of service

CPAs should first consider whether the service being provided is an attest, compilation or preparation of financial statement service as those terms are defined by accounting standards. Nonprofits often freely use terms like “audit” or “review,” but those services are not meant to be like an audit or review as defined under accounting standards.

For instance, if a charity requested a CPA to complete a form that is entitled “Audit Checklist,” the CPA may discover upon review of the form that the steps outlined do not resemble anything close to an “audit” as that term is defined by auditing standards. For example, the charity may simply be asking that the CPA reconcile beginning and/or ending cash balances to previously issued monthly reports. That procedure would constitute accounting services but would not constitute an audit. 

The implementation of Statement on Standards for Accounting and Review Services (SSARS) No. 21 (Section 70) has affected volunteer services provided by CPAs to nonprofit organizations. More specifically, Virginia license holders must realize that the preparation of financial statements for such entities by Virginia CPAs may require a firm license, even when performed as a volunteer. 

A flowchart available in the VBOA Volunteer Services Guide will walk you through how to determine which service you are specifically providing. If you are providing audit, review, attestation, compilation or financial statement preparation services, you will have to abide by certain standards:

• Audit, review, attestation or compilation service: Comply with technical standards, have a firm license and have a peer review. The 8-hour A&A CPE requirement applies.
• Financial statement preparation service: Comply with technical standards and have a firm license. No peer review is needed if preparation is the highest form of service provided, but if it is not, a peer review is needed. 

You cannot provide audit, review or attestation services if not independent. The flowchart and infographic provide more detailed information on independence.

Consulting and other services

But what if the answer is: I’m just sitting on my child’s PTA and drafting a budget? There are myriad ways you can volunteer and not have to worry about technical standards.

If you’re providing consulting services, such as accounting consultation, budget prep, etc., you only need to abide by Consulting Services Standards. Tax return preparation falls under Tax Services Standards. Other tasks like bank reconciliation review, inventory counts and others are allowed, even though they are procedures commonly performed in connection with an attest service.

Providing services as a group

If you’ve been asked to volunteer, you will need to consider if you’re simply a part of a group performing a service. For example, you may be asked to serve as a member of an “audit committee,” which then examines the financial records and issues a report indicating it “found nothing out of the ordinary.” In this case, regardless of the nature of the work undertaken or its “findings” as reported, you are not “engaged” to perform an audit. In reality, a group was engaged to perform various auditing-type procedures, you were simply part of a group activity. 

You could, along with other members of the audit committee, sign a statement related to the committee’s activities, but you should exercise care to avoid using the CPA designation in such a statement. In this situation, you would not need a firm license.

Examples

Here are a few scenarios in which you could find yourself:

• The PTA “audit” committee: A committee or task force will review the PTA’s financials and complete an audit checklist, but committee members do not need to hold a license to complete the checklist. A CPA could be a member of the committee and help complete the “audit,” but not use the CPA designation when signing off on the document.
• A nonprofit financial committee: The governing body of a nonprofit may specify procedures to be performed on financial statements by a task force or committee and communicate findings to the members. Communicating the results of the procedures does not constitute providing an assurance, and the service is not the practice of public accounting. The nonprofit is not engaging the CPA to perform assurance services.

The VBOA encourages CPAs to serve their communities as volunteers! If you still have questions about providing a volunteer service, contact the VBOA at (804) 367-8505.