The American Institute of CPAs (AICPA) proposed new professional standards for forensic accounting engagements. The proposed Statement on Standards for Forensic Services No. 1 aims to provide more tailored authoritative guidance to CPAs who perform forensic accounting services. The proposed SSFS 1 standards would classify forensic engagements as services provided for “investigation” or “litigation” as follows:
- It would identify an investigation as services performed in response to concerns of wrongdoing in which the member is engaged to perform procedures to collect, analyze, evaluate or interpret evidence to assist in reaching a conclusion on the merits of the concerns.
- Litigation would be classified as an actual or potential legal or regulatory proceeding before a trier of fact or a regulatory body — as an expert, consultant, neutral, mediator, or arbitrator — in connection with the resolution of disputes between parties. As defined in the standard, litigation does not need to be formal and includes alternative dispute resolution forums.