Highlights from the American Institute of Certified Public Accountants (AICPA) Professional Ethics Executive Committee (PEEC) held on May 9, 2018 follow:
Leases Task Force
Status: The Task Force continued to work on comments received on the proposed leases interpretation and sought the PEEC’s feedback on its deliberations and suggested direction.
Next steps: The Task Force will continue to deliberate and report back to the PEEC in August.
NOCLAR Task Force
Status:The Task Force Chair reported that his group has met monthly since the last PEEC meeting to review and discuss the comment letters to the NOCLAR proposal. He noted that of the 17 comment letters received, six were supportive (with recommendations) and 11 were not, and among those 11, some comments were in conflict. He added that the Joint AICPA/NASBA (National Association of State Boards of Accounting) Uniform Accountancy Act (UAA) Committee is also addressing NOCLAR on its agenda and that his Task Force and the UAA Committee have invited each other’s chairs to attend their meetings.
Next Steps: The Task Force plans to meet with UAA representatives and AICPA staff and continue its review of the comment letters and analysis/comparisons of the AICPA proposal to other professional standards.
Voluntary Tax Practice Reviews
Status: The PEEC agreed to issue for comment a proposed interpretation under the Confidential Client Information Rule for voluntary tax practice monitoring reviews performed under the monitoring requirements of the member’s tax practice quality control document.
Next Steps: Staff will issue the Exposure Draft subject to a sixty-day comment period.
Staff Augmentation Task Force
Status: The Task Force Chair updated the PEEC on her group’s discussions about the independence implications of a firm's performance of a nonattest service in which the firm lends staff to an attest client to work under the supervision of the client’s management. The Chair indicated that the Task Force was seeking feedback on application of the general requirements for performing nonattest services (1.295.040), i.e., whether the member should evaluate client management’s skills, knowledge and experience; client supervision as a key safeguard; whether engagements should be short-term and nonrecurring; whether the staff would appear to be employees of the client; and appropriate safeguards (e.g., avoid using the nonattest staff on the client’s attest engagement and in annual nonattest engagements, have different staff perform the services each year).
Next Steps: The Task Force will continue its deliberations and report back to the PEEC in August.
State and Local Government Affiliates
Status: The Task Force reported to the PEEC its progress in reviewing comments received on the proposed interpretation on state and local government affiliates and asked for feedback.
Next Steps: The Task Force will continue its deliberations and report back to the PEEC at future meetings.
AICPA staff updated the PEEC on recent activities of the International Ethics Standards Board for Accountants (IESBA), which included:
· Consultation paper on application of professional skepticism to all services performed by professional accountants due later this month
· Briefing paper on nonassurance services due later this month
· Upcoming roundtable discussion to discuss the above papers (June 11 in Washington, DC and later dates in Paris, France and Tokyo, Japan)
· IESBA’s future strategy and work plan
· Inducements standard, which is in the process of being finalized
The next PEEC meeting will be held in New York, NY on August 8, 2018.
A link to the PEEC's meeting information and full agenda for this and other meetings appears here.