Way back in July 2017, the American Institute of Certified Public Accountants (“AICPA”) Professional Ethics Executive Committee’s (“PEEC”) issued an Exposure Draft, Proposed Interpretation and other guidance, State and Local Government Entities. Not the easiest read (especially for those unfamiliar with government entities), although the task force went above and beyond creating great visuals and explanations to assist readers. The proposed rule sought to update the existing SLG affiliates rule under the AICPA independence rules and align the conceptual underpinnings with government accounting standards.
A higher than usual number of firms, professional organizations and governmental bodies (24) commented on the proposal. About half of the comment letters reflected a common theme -- the old rule isn't broken so let's just use that and the Conceptual Framework for Independence, thank you. Some said that evaluating and documenting assessments of SLGs under the proposed, prescriptive rules did not appear warranted and that PEEC should not adopt the rule unless it could show that the benefits outweigh the costs.
The proposal is on the PEEC's February 13 open agenda for the committee's input on next steps.