# 201 KAR 1:290: 201 KAR 1:290. Standards of practice

> Kentucky · Regulations · In force

URL: https://www.frixlaw.com/law-library/statutes/STATE_KY_KAR_T201_C001_R290

## Section

- **Citation:** 201 KAR 1:290
- **Heading:** 201 KAR 1:290. Standards of practice
- **Jurisdiction:** Kentucky
- **Kind:** Regulations
- **Status:** In force
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** Kentucky Administrative Regulations / Title 201 (Boards and Commissions) / Chapter 001 / 201 KAR 1:290

## Text

Section 1. Definitions. (1) "AICPA" means the American Institute of Certified Public Accountants. (www.aicpa.org) (2) "Audit" means an engagement performed in accordance with generally accepted auditing standards (GAAS) promulgated by the American Institute of Certified Accountants (AICPA) to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, thereby enabling the licensee to express an opinion on whether the financial statements are presented fairly, in all material respects, in accordance with an applicable financial reporting framework. (3) "Board" is defined by KRS 325.220(2). (4) "Client" means a person or entity that retains a licensee to provide a regulated activity as defined in KRS 325.220 (9) (a). (5) "Compilation" means an engagement to apply accounting and financial reporting expertise to assist management in the presentation of financial statements and report in accordance with the Statements on Standards for Accounting and Review Services without undertaking to obtain or provide any assurance that there are no material modifications that should be made to the financial statements in order for them to be in accordance with the applicable financial reporting framework. (6) "DOL" means the United States Department of Labor. (www.dol.gov.) (7) "Financial statement" means a presentation of financial data, including accompanying notes, derived from accounting records and intended to communicate an entity's economic resources and obligations at a point in time, or the changes therein for a period of time, in accordance with generally accepted accounting principles (GAAP) or another financial reporting financial framework. General use financial statements, financial forecasts, projections, and similar presentations are considered financial statements
ing records and intended to communicate an entity's economic resources and obligations at a point in time, or the changes therein for a period of time, in accordance with generally accepted accounting principles (GAAP) or another financial reporting financial framework. General use financial statements, financial forecasts, projections, and similar presentations are considered financial statements. (8) "GAAP" means generally accepted accounting principles that describe accepted accounting practices at a particular time and include broad guidelines of general applications and detailed practices and procedures that provide a standard by which to measure financial presentations. (9) "GAAS" means generally accepted auditing standards. (10) "GAO" means the Government Accountability Office. (www.gao.gov). (11) "IAASB" means the International Auditing and Assurance Standards Board. (www.iaasb.org) (12) "IFAC" means the International Federation of Accountants. (www.ifac.org) (13) "Licensee" is defined by KRS 325.220(6). (14) "PCAOB" means the Public Accounting Standards Board. (www.pcaobus.org) (15) "Regulated activity" is defined by KRS 325.220(9) (a). (16) "Review" means an engagement to obtain limited assurance as a basis for reporting whether the licensee is aware of any material modifications that should be made to the financial statements for them to be in accordance with generally acceptable accounting principles or other financial reporting framework, primarily through the performance of inquiry and analytical procedures. (17) "SEC" means the United States Securities and Exchange Commission. (www.sec.gov.) Section 2. Standards of Practice. When performing a regulated activity, a licensee shall comply with 29 U.S.C
cial statements for them to be in accordance with generally acceptable accounting principles or other financial reporting framework, primarily through the performance of inquiry and analytical procedures. (17) "SEC" means the United States Securities and Exchange Commission. (www.sec.gov.) Section 2. Standards of Practice. When performing a regulated activity, a licensee shall comply with 29 U.S.C. 18 and the following appropriate practice standards: (1) The AICPA Professional Standards as reflected in the following documents: (a) General Principles for Engagements Performed in Accordance with Statements on Standards for Accounting and Review Services; (b) Review of Financial Statements, SSARS 21 and 23; (c) Review of Financial Statements, SSARS 21, 23, and 24; (d) Compilation Engagements; (e) General Principles for Engagements Performed in Accordance with Statements on Standards for Accounting and Review Services, SSARS 21 and 23; (f) General Principles for Engagements Performed in Accordance with Statements on Standards for Accounting and Review Services, SSARS 21, 23, and 24; (g) Preparation of Financial Statements; (h) Statements on Standards for Valuation Services; (i) Review of Financial Statements: Accounting and Review Services; (j) Special Considerations-International Reporting Issues; and (k) Review of Financial Statements: Accounting and Review Services Interpretation of Section 90. (2) Government Auditing Standards, Yellow Book; (3) Auditing Standards of the Public Company Accounting Oversight Board; and (4) International Standards on Auditing issued by the IAASB and published on the IFAC web site. (www.ifac.org.). Section 3. Accounting Principles
ernational Reporting Issues; and (k) Review of Financial Statements: Accounting and Review Services Interpretation of Section 90. (2) Government Auditing Standards, Yellow Book; (3) Auditing Standards of the Public Company Accounting Oversight Board; and (4) International Standards on Auditing issued by the IAASB and published on the IFAC web site. (www.ifac.org.). Section 3. Accounting Principles. (1) A licensee who is aware that the financial statement or financial data of any entity contains a departure from the applicable financial reporting framework that has a material effect on the financial statement or financial data taken as a whole shall not: (a) Express an opinion or state affirmatively that the financial statement or financial data are presented in conformity with the applicable financial reporting framework; or (b) State that he or she is unaware of any material modifications that should be made to the statements in order for them to be in conformity with the applicable financial reporting framework. (2) Financial statements may depart from the applicable financial reporting framework, if the licensee: (a) Demonstrates that due to unusual circumstances the financial statements or data would otherwise be misleading; (b) Describes the departure; (c) States the approximate effects, if practicable; and (d) Explains the reasons why compliance with the applicable financial reporting framework would result in a misleading statement. Section 4. Generally Accepted Auditing Standards
ork, if the licensee: (a) Demonstrates that due to unusual circumstances the financial statements or data would otherwise be misleading; (b) Describes the departure; (c) States the approximate effects, if practicable; and (d) Explains the reasons why compliance with the applicable financial reporting framework would result in a misleading statement. Section 4. Generally Accepted Auditing Standards. A licensee engaged to audit financial statements shall comply with following standards: (1) Generally accepted auditing standards for audits of public companies required to register with the SEC shall use the Auditing Standards of the Public Company Accounting Oversight Board; (2) Generally accepted auditing standards for federal agencies or entities receiving significant federal financial assistance shall use Government Auditing Standards, Yellow Book issued by the GAO, Comptroller General of the United States; (3) Generally accepted auditing standards for all entities except those specified in subsection (1) and (2) of this section known as the AICPA Professional Standards and that includes the documents listed in Section 2(1)(a) through (k) of this administrative regulation; or (4) International Standards on Auditing issued by the IAASB and published on the International Federation of Accountants Web site (www.ifac.org) in the following cases: (a) The standards in subsection (1) or (3) of this section, as applicable to the specific audit engagement, do not prohibit the use of those standards; or (b) The parent company of the entity being audited is located in a foreign country and requires the use of those standards. Section 5. Practice before the Internal Revenue Service. A licensee shall comply with the standards contained in the United States Department of Treasury Circular Number 230 (2014) 31 C.F.R. Subtitle A, Part 10, (2014). Section 6. Incorporation by Reference. (1) The following material is incorporated by reference: (a) "AICPA Professional Standards," December 2015 Edition; 1
use of those standards. Section 5. Practice before the Internal Revenue Service. A licensee shall comply with the standards contained in the United States Department of Treasury Circular Number 230 (2014) 31 C.F.R. Subtitle A, Part 10, (2014). Section 6. Incorporation by Reference. (1) The following material is incorporated by reference: (a) "AICPA Professional Standards," December 2015 Edition; 1. "General Principles for Engagements Performed in Accordance with Statements on Standards for Accounting and Review Services", December 15, 2015; 2. "Review of Financial Statements, SSARS 21 and 23", December 15, 2015; 3. "Review of Financial Statements, SSARS 21, 23, and 24", December 15, 2015; 4. "Compilation Engagements", December 15, 2015; 5. "General Principles for Engagements Performed in Accordance with Statements on Standards for Accounting and Review Services, SSARS 21 and 23", December 15, 2015; 6. "General Principles for Engagements Performed in Accordance with Statements on Standards for Accounting and Review Services, SSARS 21, 23, and 24", December 15, 2015; 7. "Preparation of Financial Statements", December 15, 2015; 8. "Statements on Standards for Valuation Services", June 2007; 9. "Review of Financial Statements: Accounting and Review Services", February 2016; 10. "Special Considerations-International Reporting Issues", June 15, 2019; and 11. "Review of Financial Statements: Accounting and Review Services Interpretation of Section 90", February 2016; (b) "Government Auditing Standards, Yellow Book", July 2018 Edition; (c) "Auditing Standards of the Public Company Accounting Oversight Board", December 15, 2017 Edition; and (d) "International Standards on Auditing," 2017 Edition. (2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky State Board of Accountancy, 332 W. Broadway, Suite 310, Louisville, Kentucky 40202, Monday through Friday, 8 a.m. to 4:30 p.m.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/STATE_KY_KAR_T201_C001_R290. Check the current official text before relying on it. Not legal advice.