AICPA PEEC Seeks Feedback on Proposed Changes to Code of Professional Conduct
The AICPA Professional Ethics Executive Committee (PEEC) recently released for public comment two exposure drafts intended to align its Code of Professional Conduct with that of the International Ethics Standards Board for Accountants (IESBA), as well as clarify members' ethical responsibilities regarding the sharing of CPE examination answers.
Fees and Auditor Independence
In 2021, IESBA adopted changes to its code to clarify the fees and pricing practices of accountants and ensure they were consistent with the fundamental principles of its code, particularly regarding auditor independence. These changes became effective in December 2022.
To align with the IESBA changes more closely, the PEEC is exposing for comment two new interpretations and revisions to two interpretations of the “Independence Rule” (ET sec. 1.200.001).
The new interpretations are intended to prohibit a covered member responsible for determining fees for an attest engagement from allowing those fees to be influenced by the provision of other services to that attest client and to require that a covered member determine whether the fees the firm receives from an attest client are at a level where self-interest and undue influence threats are significant enough that safeguards must be applied.
The proposed revisions to interpretations include a revision to an existing example of a self-interest threat and the addition of a new example of an undue influence threat to the “Conceptual Framework for Independence” interpretation, as well as a new exception in the application of the “Client Affiliates” interpretation to specify the affiliates that need not be included in the calculation of the fees generated from a financial statement attest client pursuant to the proposed “Fee Dependency” interpretation.
The PEEC is seeking input on questions related to the proposed changes, and the questions can be found in the exposure draft. Comments are due by June 15 to ethics-exposuredraft@aicpa.org.
Member Responsibilities Regarding CPE Exams
To clarify members' responsibilities regarding the sharing of CPE examination answers, the PEEC is proposing revisions to related interpretations (ET sec. 1.400.001, 2.400.001 and 3.400.001) to include the sharing of exam questions and answers taken in connection with CPE courses unless collaboration is expected and permitted.
The PEEC welcomes input on the proposed changes. Comments are due by May 15 to ethics-exposuredraft@aicpa.org.