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When is bookkeeping services allowed for an attest client?

In general, bookkeeping is considered a prohibited non-audit advisory service for an attest client. The reasons it because its very difficult to perform bookkeeping services without the CPA or firm exercising some level of judgement. If judgement is exercised, then the CPA is acting on behalf of Management, and that is why bookkeeping would be prohibited.

As an example, if the CFO told the CPA “come up with an estimate for a sales return reserve and book the entry”, that is an issue. The CPA would have to use judgement to come up with the appropriate sales return reserve estimate.

However, if the CFO provided the journal entry to the CPA, and all the CPA had to do was book the journal entry for the sales return reserve, then there is no judgement, and the bookkeeping services would not be prohibited.


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