Who can audit financial statements? Can a non-CPA do it?

State accountancy laws reserve attest work for licensed CPAs. Most states model their laws on the Uniform Accountancy Act (UAA), published by NASBA and the AICPA.

• Audits and reviews. Only a licensed CPA practicing through a CPA firm can issue the report. The firm generally needs a permit in the state where it has an office.
• Compilations. A compilation report under the SSARS standards is CPA work. Non-CPAs can prepare financial statements, but state laws limit the wording they can use and bar them from using language reserved for CPA reports.
• Bookkeeping and tax returns. These are not attest services. Non-CPAs can do them.

Check the license board in your state: the Virginia Board of Accountancy, the Maryland State Board of Public Accountancy or the DC Board of Accountancy. Verify a license before you sign.

Peer review. CPA firms that perform audits, reviews and certain other engagements generally must enroll in a peer review program. Another CPA firm reviews their quality management system and engagements on a regular cycle. You can look up a firm in the AICPA Peer Review public file. Many lenders and funders ask for the latest report.

Independence. The auditor must be independent of you, in fact and in appearance. A CPA who keeps your books can audit or review them only if your organization takes on all management responsibilities and names a qualified person to oversee the work. A compilation does not require independence, but the report must say so.

The UAA separates two questions:

• Individual mobility. A CPA licensed in one state can often practice in another without a second license, under mobility rules.
• Firm permits for attest work. The UAA approach is that a firm meeting ownership and peer review requirements needs a permit in the states where it has an office. States adopt this differently.

Virginia is one example. Under Code of Virginia §54.1-4412.1, a firm whose principal place of business is outside Virginia may provide attest services to Virginia clients without a Virginia firm license if it meets conditions, including peer review enrollment. Other states have their own rules. See working with clients in multiple states.

Can a virtual firm audit you? Yes, when it is properly licensed or registered and enrolled in peer review. Document review, inquiries, bank, customer and lender confirmations, and analytics can all be done remotely. Some audits still need on-site work, such as observing an inventory count.

Best for: nonprofits, companies and associations choosing an auditor for the first time, or switching auditors, who want to confirm licensing and independence first.

1. Free initial consultation. Tell us who needs the report, what type and by when.
2. Fees quoted upfront, in writing. Transparent, fair fees in an engagement letter that states the report type and scope.
3. Licensing and independence check. We confirm we can perform the engagement for you and that we are independent.
4. Remote fieldwork. We perform the procedures the standards require and schedule any on-site work you need.
5. Report. We discuss findings with you, then issue the report.

Comparing firm sizes? See small vs large CPA firm for a nonprofit audit. Never been audited? Start with your first audit.