AICPA Identifies New Opportunity for CPAs to Serve the Public Interest

James Boissonneault, Audit Senior Manager
December 2018

In May 2018, the American Institute of Certified Public Accountants (AICPA) issued an exposure draft entitled Criteria for Evaluating the Integrity of a Set of Data. This exposure draft will establish professional standards with which CPAs can perform an agreed upon procedures engagement over the integrity of a set of data provided by management.

Today’s business environment has seen the increased use and importance of data analytics. Data analytics is the science of analyzing data from which to draw insights. Data analytics can uncover trends in mass data to help businesses and individuals make better decisions and can be used for several purposes: understanding what has happened over a period of time, understanding why a series of events occurred over a given time period, and predicting what is going to happen in the near future. However, if the data used in these analytics is unreliable, the users of the data could come to false conclusions and make poor decisions.

Services provided by CPAs under this guidance will focus on evaluating whether a set of data has integrity. Under the exposure draft, data has integrity if it meets two attributes: First, the data is presented in accordance with the criteria established in the exposure draft. When CPAs evaluate the data against the criteria established by the AICPA, the CPAs will consider the data’s relevance, objectivity, measurability, and completeness. Second, the data is consistent with the description provided by management. CPAs will follow existing guidance under AT-C section 105, Concepts Common to All Attestation Engagements.

The exposure draft includes an implementation guide to assist CPAs and management when performing an agreed upon procedure engagement over data integrity. The implementation guide addresses two significant topics: the intended use of the data and the description of the data provided by management.

The AICPA is currently reviewing stakeholder comments over the exposure draft before finalizing the new standard. Future engagements performed in accordance with this exposure draft should provide management with more reliable data with which to make better decisions.

Please contact James Boissonneault at 1.800.244.7444 if you have questions about how your business may be affected by these changes.

Disclaimer of Liability: This publication is intended to provide general information to our clients and friends. It does not constitute accounting, tax, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.