Member | Established: 1887 | Member since 1977
The Association of International Certified Professional Accountants (the Association) combines the strengths of the American Institute of CPAs (AICPA) and the Chartered Institute of Management Accountants (CIMA). It represents 657,000 members and students in public and management accounting and advocates for the public interest and business sustainability on current and emerging issues. With broad reach, rigor and resources, the Association advances the reputation, employability and quality of CPAs, CGMA designation holders and accounting and finance professionals globally. As part of IFAC membership obligations, the Association fulfills SMOs in U.S. through AICPA and in UK through CIMA.
Statements of Membership Obligation (SMO)
The Statements of Membership Obligations form the basis of the IFAC Member Compliance Program. They serve as a framework for credible and high-quality professional accountancy organizations focused on serving the public interest by adopting, or otherwise incorporating, and supporting implementation of international standards and maintaining adequate enforcement mechanisms to ensure the professional behavior of their individual members.
SMO 1: Quality Assurance
With the Public Company Accounting Oversight Board (PCAOB) responsible for quality assurance (QA) reviews for public business entities, the role of the AICPA is to establish and implement a QA review system for its members engaged in public practice for nonpublic entities. To this end, it has established a Peer-Review-Program in line with the SMO 1 requirements. It has policies and procedures for its QA review system, which it reviews periodically to ensure its effectiveness.
The AICPA has ongoing processes to educate, communicate, and support its members with quality control standards. In its SMO Action Plan, the AICPA reports that it develops guidelines, workshops, and other training initiatives, and disseminates information on the results of peer reviews to its members and the general public. In addition, the AICPA advocates and promotes the need to enact the peer review regulation to the state boards of accountancy that have not already done so in their jurisdictions.
The AICPA Peer Review Board (PRB) is currently working on three strategic areas: i) enhanced oversight, i.e., implementing a process based on a statistical sample of peer reviews to be selected each year and a subject matter expert is engaged to perform oversight; ii) revised peer review standards, including issuing clarified peer-review standards effective May 1, 2022, to improve their understandability and usability as well as to promote consistency in the peer review process and quality in the work performed by firms; and iii) developing and implementing a strategy to address Single Audits; Audit Evidence; Risk Assessment and Response; Auditing Accounting Estimates; Environmental, Social and Corporate Governance Reporting, in addition to the Quality Management Standards before their effective date.
To promote the adoption of international standards, the AICPA comments on every PCAOB proposed standard through its Center for Audit Quality. The Auditing Standards Board (ASB) chair of the AICPA is an observer to the PCAOB’s Standing Advisory Group, and the ASB chair and relevant AICPA staff meet regularly with PCAOB leadership to share agendas and dialogue. Where relevant and applicable, ISA are recommended for the PCAOB's consideration.
The AICPA has demonstrated an ongoing process to maintain its level of fulfillment with the SMO 1 obligations and is committed to continuous improvement.
SMO 2: International Education Standards
Initial professional development (IPD) and continuing professional development (CPD) requirements are established by the state boards of accountancy and the professional accountancy organizations in the United States. The AICPA reports it has created and implemented IPD and CPD requirements for its members that fulfill those of the revised IES (2019).
As part of its activities related to IPD requirements, the AICPA supports the National Association of State Boards of Accountancy (NASBA) in the licensing of professional accountants, particularly in developing the Uniform CPA Exam. The AICPA reports that, after completing an extensive analysis and broad consultation, the CPA Exam was updated in April 2017.
Since then, the AICPA and NASBA have developed a new CPA curricula and exam expected to launch in 2024, as part of their CPA Evolution initiative. The initiative is transforming the CPA licensure model to recognize the rapidly changing skills and competencies the practice of accounting requires today and will require in the future. This is aligned with the latest principles and requirements of the IES.
The AICPA also raises awareness about the IES and participates in public consultations. Furthermore, the AICPA monitors the progress made by the state boards of accountancy on incorporating the IES requirements and conducts surveys of accounting firms and its members on policies regarding adherence to the IES.
The AICPA indicates that it disseminates the IES through its website, participates in international consultations on an ongoing basis, and in the past nominated and supported representatives to serve on the IAESB.
The AICPA has demonstrated an ongoing process to maintain its level of fulfillment with the SMO 2 obligations and is committed to continuous improvement.
SMO 3: International Standards on Auditing
The Auditing Standards Board (ASB) of the AICPA is only involved in setting auditing standards for nonpublic entities, while the Public Company Oversight Board (PCAOB) is responsible for setting auditing standards for public business entities. The AICPA reports that the ASB standards are converged with the 2020 ISA and it has policies and procedures to consider and incorporate new and revised ISA on an ongoing basis.
To promote the adoption of international standards, the AICPA comments on every PCAOB proposed standard through its Center for Audit Quality. The ASB chair of the AICPA is an observer to the PCAOB’s Standing Advisory Group, and the ASB chair and relevant AICPA staff meet regularly with PCAOB leadership to share agendas and thoughts. Where relevant and applicable, ISA are recommended for the PCAOB's consideration.
In its SMO Action Plan, the AICPA indicates that it has developed auditing industry guides, practice aids, risk alerts, and provided training to assist with implementation. In addition, the AICPA disseminates information on IAASB pronouncements through its Journal of Accountancy, newsletters, and other communication vehicles.
The AICPA reports that it participates in the international standard-setting process by providing comments on IAASB exposure drafts, nominating and supporting representatives to serve on the IAASB, and contributing to various IAASB task forces, working groups, and committees.
The AICPA has demonstrated an ongoing process to maintain its level of fulfillment with the SMO 3 obligations and is committed to continuous improvement.
SMO 4: Code of Ethics for Professional Accountants
The AICPA has responsibility for adopting ethical requirements for its members and reports that it has established an AICPA Code of Professional Conduct that incorporates ethical requirements that are no less stringent than those of the 2015 IESBA Code of Ethics. The AICPA states that the Professional Ethics Executive Committee (PEEC) extensively reviewed and restructured its code in 2014. The PEEC has processes in place to consider any new and revised requirements issued by the IESBA and determine what convergence may be needed. To this effect, the AICPA is reviewing the NOCLAR standard, and several other standards included in the IESBA’s 2018 restructured Code and further standards updates (e.g. NAS, fees) effective in 2022.
The AICPA indicates that it disseminates IESBA exposure drafts and provides quarterly updates on the activities of IESBA in its newsletters, which are circulated to its members and other interested parties. In addition, the AICPA has a hotline that is continuously available for its members to seek advice on ethical conflicts and interpretations of the Code of Ethics.
In addition, the AICPA reports that it participates in the international standard-setting process by providing comments to the IESBA exposure drafts and nominating and supporting representatives to the IESBA Board and task forces.
It is in the public interest that professional accountants adhere to the latest ethical requirements issued by the IESBA. The AICPA is encouraged to continue pursuing its timely convergence process to eliminate differences between its Code and the International Code of Ethics. The 2021 Handbook is currently effective, with changes in the terms and concepts used in the IAASB's International Standard on Assurance Engagements (ISAE) 3000 (Revised), and revisions to promote the role and mindset expected of all professional accountants. In addition, the objectivity of an engagement quality reviewer and other appropriate reviewers, revisions to the non-assurance services, and revisions to the fee-related provisions will be effective in December 2022.
Given that the state accountancy boards may also set ethical requirements (which are generally aligned to the AICPA Code), the AICPA is also encouraged to note its engagements to promote the adoption of its Code of Ethics to the remaining state boards that have not adopted identical or similar provisions of the AICPA Code.
SMO 5: International Public Sector Accounting Standards
As it has no legal responsibility for the adoption of public sector accounting standards, the AICPA reports that it encourages the adoption and implementation of robust public sector accounting and reporting standards for use by governments and other public sector entities in the United States. It does this by encouraging the regulators (the U.S. Governmental Accounting Standards Board and the Federal Accounting Standards Advisory Board) to harmonize the public sector accounting and reporting standards with the IPSAS where appropriate.
The AICPA disseminates IPSAS information through its magazine Journal of Accountancy, its newsletter, the CPA Letter, and various other communication vehicles and promotes IPSAS in conferences and presentations.
In addition, the AICPA nominates and supports members to the IPSASB and IPSASB task forces, works with the IPSASB in the development of its standards, and provides comments on Exposure Drafts.
The AICPA has demonstrated an ongoing process to maintain its level of fulfillment with the SMO 5 obligations and is committed to continuous improvement.
SMO 6: Investigation and Discipline
The state boards of accountancy have the authority to conduct investigative and disciplinary processes for licensed professional accountants in their respective jurisdictions. The AICPA and 48 out of 55 state boards have joined together to create and participate in the Joint Ethics Enforcement Program (JEEP). AICPA reports that the JEEP Manual of Procedures fulfills all the requirements of SMO 6. The AICPA indicates that it has an ongoing process in place to periodically benchmark the I&D system against the requirements of SMO 6.
The AICPA disseminates information on its website about the results of disciplinary actions to notify its members and the general public.
Enforcement mechanisms that meet the SMO 6 benchmark for all professional accountants are important to public trust and confidence in the accountancy profession. The AICPA is encouraged to indicate its engagements with the remaining 7 state boards that are not a part of the JEEP as having all state accountancy boards adhere to the JEEP Procedures that align with SMO 6 best practices would be in the public interest.
SMO 7: International Financial Reporting Standards
In the United States the Financial Accounting Standards Board (FASB) is the entity responsible for the adoption of accounting standards and it has been working with the IASB since 2002 to achieve convergence of IFRS and the U.S. Generally Accepted Accounting Principles. The AICPA has no responsibility for the adoption of accounting standards, but it indicates that it supports the adoption of IFRS.
The AICPA supports the FASB’s standard-setting process, participates in public consultations, and promotes the convergence process. The AICPA also provides comment letters to the IASB on significant consultation documents. The AICPA states that since 2008, it has raised awareness about the IFRS to its members, financial professionals, government officials, and academia through a combination of publications, speeches, conferences, and office visits. In addition, the AICPA launched the IFRS.com website to disseminate resources related to the IFRS, the convergence process, and IFRS exposure drafts and standards.
The AICPA indicates that it incorporates IFRS questions into the CPA Exam, offers courses and publications to facilitate the implementation and application of IFRS, provides online resources for IFRS for SMEs, and developed the AICPA IFRS Certificate Program.
The AICPA has demonstrated an ongoing process to maintain its level of fulfillment with the SMO 7 obligations and is committed to continuous improvement.
IFAC bears no responsibility for the information provided in the SMO Action Plans prepared by IFAC member organizations. Please see our full Disclaimer for additional information.
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