PRIMARY ISSUES

There were two primary but independent issues that the Board needed to address.

1. Should the AICPA change its governing rules to allow CPAs in nontraditional firms to issue compilation reports?

2. Should CPAs be permitted to perform a financial statement service that is below a compilation (a fourth level of service)?

Both of these issues are highly controversial and have been debated before. Appendix B includes a history of the debate relating to a fourth level of service. The issue of CPAs performing compilation services in nontraditional firms is relatively new in that non-traditional firms only became prevelant in the late 1990s. However, the issue of whether compilations should be included within the definition of attest is more recent and was debated during the drafting of the recently completed UAA. A significant majority of Council, at the time of the formulation of the UAA, supported including compilations in the definition of attest. Given the new facts and current circumstances, some argue that Council might reach a different conclusion if the question of whether compilations should be included within the definition of attest were asked again.