Independence and Ethics Developments Audit Risk Alert

This Audit Risk Alert informs you of recent developments in the area of independence and ethics for accountants-an area receiving continued and increased attention from regulators, investors, the news media, and others. 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 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, IESBA and IFAC. The alert includes information on recently issued independence and ethics developments including the following:

• AICPA Ethics Interpretation No. 501-8, "Failure to Follow Requirements of Governmental Bodies, Commissions, or Other Regulatory Agencies on Indemnification and Limitation of Liability Provisions in Connection with Audit and Other Attest Services"
• AICPA Ethics Ruling No. 94, "Indemnification Clause in Engagement Letters" and Ethics Ruling No. 102, "Indemnification of a Client"
• AICPA FAQ on the independence impact of providing FASB Statement No. 141 (revised 2007) services to an attest client
• Recognition by the AICPA Council of the IASB as an accounting standard setter
• SEC Rule 2-01, Qualifications of Accountants, of Regulation S-X
• PCAOB independence and ethics rules and common deficiencies observed by PCAOB inspectors

You will also find information on emerging independence and ethics issues, including the following:

• Networks and network firms
• PEEC's Proposed Framework for Meeting the Objectives of the Fundamental Principles
• XBRL and IFRS nonattest services
• Independence rules pertaining to employee benefit plan audits
• IFAC
• IESBA

This publication is designed to provide illustrative information with respect to the subject matter covered. It does not establish standards or preferred practices. This document has not been considered or acted upon by senior technical committees of the AICPA or the AICPA Board of Directors.