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Two weeks ago, this newsletter commented on a press released in which the American Institute of CPAs quoted its for-profit subsidiary CP2Biz regarding the the new Service Organization Control reports, which are designed to replace SAS 70 reports regarding companies that outsource services or process to third parties. Very quickly, Erik Asgeirsson, CEO of CPA2Biz, agreed that his organization didn't handle the issue well.

The release quotes CPA2Biz as the AICPA's as a "leading cloud services provider" and also cited Intacct, which markets Internet-based accounting applications, without noting that business's marketing relationship with CP2Biz. Asgeirsson wrote that, "We should have mentioned our affiliation to Intacct. On hindsight I also think it would have been better not to include CPA2Biz in the release. We should have done a separate release related to our support and interest related to the SOC reports which I think our extremely important for the web based solutions we are distributing."

We agree on that point. What I don't agree with is the comment that he made, and I've heard before from others, that other nonprofit organizations have for-profit operations. Sorry, this isn't the same. This is not a museum with a gift shop or AARP offering services to its members, even though the AICPA does some of those same things such as providing insurance programs. The best description of the difference is stated on the AICPA's home page. "The AICPA sets ethical standards for the profession and U.S. auditing standards for audits of private companies, non-profit organizations, federal, state and local governments. It develops and grades the Uniform CPA Examination". The AICPA is a standards-setting body, not just a membership organization. Its standard setting relates to requirements established by government entities, which I argue gives it quasi-governmental functions.

But it also is a vendor that sells products and has shows and conferences for which it charges exhibit fees for the organizations that it seeks to compete with. I'll repeat that it's having it both ways or several ways.

I doubt that I'm going to get kicked out of AARP for violating professional standards. It's not testing me on my behavior as someone over the age of 50. It designs reports for third-party providers who offer cloud services and then it recommends to its members a particular cloud product, which it encourages them to use for providing services to their clients.  And the work performed for these clients is subject to standards set by the AICPA.

No, the AICPA is a fundamentally different being. And it's time for some of the organizations that set standards about the accounting profession to take a look at this relationship and see what they think about how this operates. Is this the kind of independence that CPAs are supposed to adhere to in their own behavior?

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