Published under s. 35.93, Wis. Stats., by the Legislative Reference Bureau. 1 ACCOUNTING EXAMINING BOARD Accy 1.003 Chapter Accy 1 RULES OF CONDUCT Subchapter I — Applicability and Definitions Accy 1.204 Other technical standards. Accy 1.001 Applicability of rules of conduct to certified public accountants. Accy 1.205 Standards for auditing, accounting and review services, and attesta- Accy 1.002 Applicability of rules of conduct to certified public accountants who tion engagements. have a significant influence over a CPA−related business or who advertise as a CPA. Subchapter IV — Responsibilities to Clients Accy 1.003 Definitions. Accy 1.301 Confidential client information. Accy 1.302 Contingent fees, commissions and referral fees. Subchapter II — Professional Conduct, Integrity, and Objectivity Subchapter V — Other Responsibilities and Practices Accy 1.101 Professional conduct. Accy 1.401 Acts discreditable. Accy 1.102 Integrity and objectivity. Accy 1.402 Advertising or other forms of solicitation. Accy 1.404 Incompatible occupations. Subchapter III — Competence and Technical Standards Accy 1.405 Firm Names. Accy 1.201 General standards. Accy 1.406 Practice while suspended. Accy 1.202 Auditing standards. Accy 1.407 Communications. Accy 1.203 Accounting principles. Accy 1.408 Ownership requirements. Note: Chapter Accy 1 as it existed on June 30, 1974 was repealed and a new Chap- in the opinion of the certified public accountant, the statements ter Accy 1 was created, Register, June, 1974, No. 222, effective July 1, 1974. conform with generally accepted accounting principles or, if Subchapter I — Applicability and Definitions applicable, with another comprehensive basis of accounting. (2m) “Board” means the accounting examining board. Accy 1.001 Applicability of rules of conduct to certi- (2r) “Certified public accountant” or “CPA” means a person fied public accountants. (1) Chapters Accy 1 to 6 apply to considered to be in practice as a certified public accountant under a person who practices as a certified public accountant in this s. 442.02, Stats. state. (3) “Commission” means compensation, except a referral fee, (2) A certified public accountant may be held responsible for for recommending or referring any product or service to be sup- compliance with the rules of the board by any person associated plied by another person. with the certified public accountant in a firm who is either under (4) “Compilation of a financial statement” means a presenta- his or her supervision or is a member of the firm. tion of information in the form of a financial statement that is the (3) A certified public accountant shall not permit others to representation of any other person without the undertaking of the carry out acts on the accountant’s behalf, either with or without certified public accountant to express any assurance on the state- compensation, which, if carried out by the certified public accoun- ment. tant, would violate chs. Accy 1 to 6. (5) “Contingent fee” means a fee established for the perfor- 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. mance of any service according to an arrangement in which no fee Register May 2004 No. 581, eff. 6−1−04; 2015 Wis. Act 217: am. Register May will be charged unless a specified finding or result is attained, or 2016 No. 725, eff. 6−1−16. in which the amount of the fee is otherwise dependent upon the finding or result of such service. Accy 1.002 Applicability of rules of conduct to certi- fied public accountants who have a significant influ- (6) “CPA−related business” means a business that performs ence over a CPA−related business or who advertise as for clients any of the professional services related to accounting, a CPA. (1) A person licensed as a certified public accountant tax, personal financial planning, or litigation support services or that has significant influence over a CPA−related business is con- those services for which standards are established relating to sidered to be practicing as a certified public accountant in the audits, compilations and reviews of financial statements and CPA−related business and all persons with ownership interest in examinations or compilations of prospective financial informa- the business shall follow the rules of the board in the operation of tion. the CPA−related business. (7) “Examination of prospective financial information” (2) A person who operates a business and is licensed as a certi- means an evaluation by a certified public accountant of a forecast fied public accountant and who advertises or otherwise holds out or projection, the support underlying the assumptions in the fore- as a certified public accountant shall follow the rules of the board cast or projection, whether the presentation of the forecast or pro- in the operation of any business. jection is in conformity with professional presentation guidelines, History: Cr. Register, June, 1982, No. 318, eff. 7−1−82; CR 03−071: r. and recr. or, whether the assumptions in the forecast or projection provide Register May 2004 No. 581, eff. 6−1−04; 2015 Wis. Act 217: am. Register May a reasonable basis for the forecast or projection. 2016 No. 725, eff. 6−1−16. (7m) “Financial statements” means statements and footnotes Accy 1.003 Definitions. As used in chs. Accy 1 to 6: related thereto that undertake to present an actual or anticipated financial position as of a point in time, or results of operations, (1) “Attest service” means any of the following, if performed cash flow, or changes in financial position for a period of time, in or intended to be performed in accordance with the statements conformity with generally accepted accounting principles or incorporated under s. Accy 1.205: another comprehensive basis of accounting. “Financial state- (a) An audit or any other engagement. ments” does not include incidental financial data included in man- (b) A review or compilation of a financial statement. agement advisory service reports to support recommendations to (c) An examination of prospective financial information. a client; nor does it include tax returns and supporting schedules. (2) “Audit” means an examination of financial statements of (8) “Firm” means a proprietorship, partnership, limited liabil- a person by a certified public accountant, conducted in accordance ity partnership, corporation, service corporation, or limited liabil- with generally accepted auditing standards, to determine whether, ity company. Published under s. 35.93, Stats. Updated on the first day of each month. Entire code is always current. The Register date on each page is the date the chapter was last published. Register May 2016 No. 725 Published under s. 35.93, Wis. Stats., by the Legislative Reference Bureau. Accy 1.003 WISCONSIN ADMINISTRATIVE CODE 2 (9) “Forecast” means a prospective financial statement that (2) All definitions included in the American Institute of Certi- presents, to the best of the responsible party’s knowledge and fied Public Accountants’ Code of Professional Conduct shall belief, an entity’s expected financial position, results of opera- apply only within that document. tions, and changes in financial position or cash flows that are Note: The AICPA Code of Professional Conduct is available electronically at based on the responsible party’s assumptions reflecting condi- http://pub.aicpa.org/codeofconduct/Ethics.aspx or may be obtained from: American Institute of Certified Public Accountants tions it expects to exist and the course of action it expects to take. 1211 Avenue of the Americas (10) “Member of a firm” means a director, manager, New York, NY 10036−8775 employee, officer, owner, shareholder, principal, or partner of a History: Cr. Register, June, 1974, No. 222, eff. 7−1−74; cr. (2), Register, Decem- ber, 1974, No. 228, eff. 1−1−75; cr. (2) (d), Register, February, 1976, No. 242, eff. firm. 4−1−76; cr. (2) (e), Register, January, 1977, No. 253, eff. 3−1−77; r. and recr. (1) and (11) “Person” means any natural person, firm, association, or cr. (2) (f), Register, July, 1979, No. 283, eff. 9−1−79; r. and recr. (2) (a), am. (2) (d) 2. intro. and d., cr. (2) (g), Register, July, 1980, No. 295, eff. 8−1−80; corrections other legal entity. made under s. 13.93 (2m) (b) 1. and 5., Stats., Register, March, 1993, No. 447; CR (12) “Projection” means a prospective financial statement 02−120: r. and recr. Register November 2003 No. 575, eff. 12−1−03; 2013 Wis. Act 210: am. Register April 2014 No. 700, eff. 5−1−14; 2015 Wis. Act 217: r. and recr. that presents, to the best of the responsible party’s knowledge and Register May 2016 No. 725, eff. 6−1−16. belief, given one or more hypothetical assumptions, an entity’s expected financial position, results of operations, and changes in Accy 1.102 Integrity and objectivity. No person financial position or cash flows that are based on the responsible licensed to practice as a certified public accountant may do any of party’s assumptions reflecting conditions it expects would exist the following: and the course of action it expects would be taken given such hypothetical assumptions. (1) Knowingly misrepresent facts. (13) “Referral fee” means compensation for recommending (2) When engaged in the practice of public accounting, or referring any service of a certified public accountant to any per- including the rendering of tax and management advisory services, son. subordinate his or her judgment to others. History: Cr. Register, June, 1974, No. 222, eff. 7−1−74; corrections made under (14) “Review” means to perform an inquiry and analytical s. 13.93 (2m) (b) 5., Stats., Register, March 1993, No. 447; CR 03−071: am.