Independence and Ethics Developments Audit Risk Alert

Need to know the recent developments in the area of independence and ethics for accountants? This Audit Risk Alert focuses on recent developments in independence and ethics for accountants—an area that is receiving increasing attention from regulators, investors, the news media, and others. The current economic downturn is stress testing independence and ethics standards, resulting in new standards and amendments to existing standards designed to assist accountants and CPAs in evaluating their independence from their clients and understanding the ethical issues they may encounter.

Moreover, this alert helps you understand your independence and ethics requirements under the AICPA Code of Professional Conduct and, if applicable, certain other rule-making and standard setting bodies. The alert includes a plain-English digest of the AICPA Independence Rules.

This Audit Risk Alert includes not only recent developments related to AICPA independence and ethics rules, but also independence and ethics developments from the SEC, PCAOB, GAO, DOL, IRS, IESBA and IFAC. This Audit Risk Alert contains information on independence and ethics developments, including the following:

• PCAOB registration requirement for auditors of broker-dealers that are nonissuers
• Internal Revenue Code regulations regarding disclosure or use of taxpayer information
• Amendments to the FDIC's annual audit and reporting requirements clarifying independence requirements and expanding audit committee oversight
• Discussion of PCAOB rules regarding independence and ethics
• Compliance discussion of SEC independence rules regarding prohibited nonaudit services, initial public offerings, audit partner rotation, and communications with audit committees
• Discussion of the GAO independence rules

This Audit Risk Alert also contains discussion on proposals and other developments that are on the horizon, including the following:

• Proposed revisions to the Statements on Standards for Tax Services
• The ARSC's three proposed Statements on Standards for Accounting and Review Services issued in response to Reliability Task Force Recommendations
• Discussion of AICPA Professional Ethics Executive Committee projects addressing such topics as:
  • participation of a covered member's immediate family in an employee benefit plan,
  • affiliates of attest clients,
  • inadvertent violations of the AICPA Code of Professional Conduct,
  • eXtensible business reporting language,
  • transitional financial reporting from U.S. GAAP to IFRS,
  • confidential client information, and
  • international ethics convergence and monitoring.