By Shannon Daly

CPAs play a vital role in maintaining the financial integrity of businesses and individuals. Part of their responsibility is staying current with ever-changing compliance and legal regulations impacting financial reporting, tax obligations, and accounting practices. Whether in private practice or working within a large organization, CPAs must stay vigilant to protect themselves and their clients.

This blog provides an overview of key compliance requirements CPAs can apply in their practices or share with their employers and clients.

Professional Standards and Codes of Conduct

CPAs are bound by professional ethics outlined by organizations such as the American Institute of Certified Public Accountants (AICPA). These codes emphasize integrity, objectivity, due care, and confidentiality. Adhering to these principles protects both CPAs and their clients from legal and financial risks. For example, avoiding conflicts of interest and ensuring transparency in financial reporting can help reduce the risk of litigation.

Tax Law Compliance

Keeping up with federal, state, and local tax regulations helps businesses and individuals avoid fines and penalties. CPAs should educate clients about maintaining accurate financial records and meeting deadlines to prevent audits. Staying informed on tax law changes also allows CPAs to maximize tax benefits while ensuring compliance.

Financial Reporting Standards

CPAs must be knowledgeable of Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS). Compliance with these standards ensures transparent and accurate financial statements, which is critical for maintaining credibility. Misstated financials often lead to regulatory scrutiny and legal consequences.

Industry-Specific Regulatory Compliance

Different industries have unique regulatory environments that impact their financial reporting. For instance, CPAs working in health care, nonprofits, or financial services must ensure compliance with specific regulations such as HIPAA, IRS nonprofit reporting, or the Sarbanes-Oxley Act. Aligning services with industry-specific requirements protects clients from unnecessary risks.

Data Security and Privacy Compliance

CPAs handle a lot of confidential financial data, which makes compliance with data security laws like Europe’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) essential. Implementing robust cybersecurity measures, such as encryption and secure data storage, will help protect sensitive information. Educating clients on their data protection responsibilities also prevents costly breaches and reinforces trust.

Anti-Money Laundering and Anti-Fraud Measures

CPAs often detect fraud, embezzlement, or money laundering. Familiarity with anti-money laundering laws, such as the Bank Secrecy Act, is critical. CPAs must conduct due diligence, report suspicious activity, and foster a culture of compliance within their organizations to prevent illegal activity.

As trusted advisers, CPAs must stay informed about compliance and legal requirements. By proactively managing risks, CPAs protect their reputation and provide essential value to businesses and individuals alike. Through education and a commitment to ethical practices, CPAs help create a transparent and compliant financial environment.

Shannon Daly is a marketing specialist and staffing coordinator with CTN Solutions in Blue Bell, Pa. She can be reached at sdaly@ctnsolutions.com.

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^{Statements of fact and opinion are the authors’ responsibility alone and do not imply an opinion on the part of the PICPA's officers or members. The information contained herein does not constitute accounting, legal, or professional advice. For actionable advice, you must engage or consult with a qualified professional.}