Statements of Position



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Although CPAs have provided personal financial planning services to clients for a long time, they now provide such services in a more structured way. Consequently, significant practice issues in personal financial planning are not covered by existing professional standards. In 1989, the Personal Financial Planning (PFP) Division undertook a project to provide guidance on the CPA's responsibilities in personal financial planning engagements. Its purpose was to promote consistency and quality in the performance of personal financial planning services. This proposed statement on responsibilities in personal financial planning practice (SRPFPP) is not intended to establish a separate code of conduct in personal financial planning practice, yet it provides useful guidance to CPAs performing such services. The proposed Statement is advisory, that is, it does not constitute an enforceable technical standard and is educational in nature. The proposed Statement also protects the public by ensuring the competency of personal financial planning services provided by CPAs. The AICPA's Personal Financial Planning Executive Committee is the senior technical committee of the AICPA designated to issue advisory statements on personal financial planning practice. However, the PFP Executive Committee, concerned about preventing standards overload, expects to limit SRPFPPs to substantive issues of general usefulness not covered by existing standards. This proposed Statement does not supersede the Statements on Standards for Accounting and Review Services, the Statements on Responsibilities in Tax Practice, the Personal Financial Statements Guide, the Guide for Prospective Financial Statements, and the Code of Professional Conduct. This proposed Statement defines and provides guidance for financial planning engagements. It defines a personal financial planning engagement as developing strategies and making recommendations that will assist clients in achieving their personal financial goals. The proposed SRPFPP provides guidance on defining engagement objectives, planning specific procedures appropriate for the engagement, developing a basis for recommendations, communicating those recommendations, assisting the client to act on planning decisions, monitoring the client's progress in achieving established goals, updating recommendations, and helping the client to revise planning decisions. Furthermore, the proposed SRPFPP recommends that the CPA disclose the fact that recommendations are based only on selected goals. A sample disclosure to be made when recommendations are made only on selected goals is contained in the proposed SRPFPP. This proposed SRPFPP was approved by the Statements on Responsibilities in PFP Practice Subcommittee and the PFP Executive Committee. In addition, the Tax Executive Committee has approved the issuance of this exposure draft. After the conclusion of the comment period, the Statements on Responsibilities in PFP Practice Subcommittee will consider all comments received and make any necessary changes to the proposed Statement. The revision will then be voted on by the Statements on Responsibilities in PFP Practice Subcommittee and the PFP Executive Committee. A two-thirds vote for approval by each committee is required for this proposed Statement to become effective.

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Finance, Personal -- United States -- Accounting; Financial planners -- United States; Investment advisors -- United States


Accounting | Taxation


Originally published by: American Institute of Certified Public Accountants; Copyright and permission to reprint held by: American Institute of Certified Public Accountants.

Proposed statement on responsibilities in personal financial planning practice : basic PFP engagement functions and responsibilities;Basic PFP engagement functions and responsibilities; Exposure draft (American Institute of Certified Public Accountants), 1992, March 31



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