Designed by Congress to provide a lifeline to small businesses and not-for-profits that are suffering from the economic effects of the coronavirus pandemic, the Paycheck Protection Program (PPP) has resulted in many questions for CPAs attempting to serve their clients.
Administered by the U.S. Small Business Administration, the PPP provides forgivable loans to help small businesses cover expenses such as payroll, mortgage interest payments, rent, and utilities.
PPP-associated complexities for CPAs include concerns about acting as agents, and whether performing certain services in association with PPP loans would violate independence, create a conflict of interest, or result in receipt of a contingent fee.
The AICPA Center for Plain English Accounting (CPEA) published a document Wednesday that is designed to help CPAs navigate these challenging issues.
The document includes discussion of:
- The importance of advising clients.
- Acting as agents and agent fees.
- Contingent fees.
- Independence considerations.
- Special considerations related to assisting attest clients — and nonattest clients.
- CPA firms’ eligibility for applying for PPP loans.
- Loan forgiveness considerations.
The CPEA will continue monitoring accounting and auditing issues and guidance related to the pandemic and will publish additional guidance as new developments arise.